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Labor Department Sues Home Care Companies

May 18, 2018, 10:16 AM

The Labor Department filed a handful of lawsuits against home care providers for wage-and-hour violations, signaling that the DOL isn’t likely to soon revisit an Obama era rule that entitles domestic service workers to minimum wages and overtime pay.

The agency has sued at least five different home care companies in separate cases over the past three weeks, Bloomberg Law’s review of federal court dockets shows. The department accuses the companies of failing to pay home care workers minimum hourly wages or refusing to pay the workers time-and-a-half rates for all hours beyond 40 per week.

A Labor Department spokesman didn’t immediately respond to Bloomberg Law’s request for comment.

Each of the lawsuits cites a regulation enacted in 2015 that extended wage-and-hour protections under the Fair Labor Standards Act to a majority of the roughly 3 million home health and personal service aides working across the country. Critics of the rule said the DOL overstepped its authority by extending the law to “companionship services” workers because Congress meant to exempt them.

The U.S. Supreme Court in 2016 declined to hear a challenge by some of those critics: the Home Care Association of America, the National Association for Home Care and Hospice, and the International Franchise Association.

It’s too soon to tell if the new lawsuits are “a blip or a trend,” Paul DeCamp, who ran the wage-and-hour division during the George W. Bush administration, told Bloomberg Law. “It would make sense to keep an eye on whether we see further lawsuits or more settlements.”

DeCamp represents businesses in labor and employment matters for Epstein Becker & Green PC.

Industry Growing

“The basic thinking was that home care workers deserve basic labor protections just like everyone else,” Laura Tatum, who was a policy adviser in the Labor Department’s Wage and Hour Division when the rule took effect, told Bloomberg Law. “This industry and these workers are only going to become more and more important as the population ages.”

Home care jobs are expected to skyrocket, increasing by more than 40 percent over the next decade, according to the DOL’s Bureau of Labor Statistics. That’s thanks largely to an expected increase in elderly people living at home, rather than in nursing and assisted living facilities.

DOL regional solicitors’ offices filed the lawsuits in federal courts in Virginia, Maryland, Connecticut, and Ohio. Three of the cases came from the department’s Arlington, Va., field office. The companies being sued are Access Home Care, High Quality Care Nursing Agency, At Home Personal Care Services, Care at Home, and Healing Springs Med-Care.

Dan Karp, who owns Care at Home in Connecticut, told Bloomberg Law that the lawsuit stems from a DOL audit in July 2016. “These workers never came to us to complain,” Karp said. “The department performed an audit, contacted our workers, and then said there was a problem.”

Representatives for the other companies didn’t immediately respond to Bloomberg Law’s requests for comment.

Rule Survived Court Battle

The 2015 regulation removed the majority of home care workers from a minimum wage and overtime exemption for workers who provide “companionship services.” The rule states that the exemption applies only to home care workers hired directly by the families for whom they provide services and not those staffed by third-party employers.

The rule drew swift criticism from the home care industry and some Republicans, who said it would increase the cost of services for elderly and disabled people. They also accused the Obama administration of using the regulatory process to change the law in a way that it couldn’t convince Congress to do.

A federal judge in Washington shot down much of the rule shortly before it was slated to go into effect. An appeals court later lifted an injunction blocking the regulation.

A bill introduced by Sen. Pat Roberts (R-Kan.) in 2015 to undo the rule got little attention in Congress.

Sen. Marco Rubio (R-Fla.), in a Feb. 5 letter to Labor Secretary Alexander Acosta, said he’s concerned about reports that the DOL is still using an Obama-era approach to determine whether workers for home care registries that link them with clients should be classified as independent contractors or employees. Contractors aren’t covered by federal wage-and-hour law and other protections on the job.

To contact the reporter on this story: Chris Opfer in New York at

To contact the editor responsible for this story: Peggy Aulino at; Terence Hyland at