Federal Judge Vacates USDOL’s New Definition of Companionship Services Under Final Rule

Written by Stephen E. Zweig.

1/14/2015

This afternoon Judge Richard Leon of the U.S. District Court, District of Columbia, issued a decision vacating the U.S. Department of Labor’s Final Rule on Domestic Service Employees. He reasoned that: the DOL exceeded its authority by promulgating a rule that essentially defined the “companionship services” exemption out of existence as applied to the vast majority of home care employers and, by so doing, contravening Congress’ intent with regard to the exemption. Judge Leon’s decision concluded “the Department is trying to do through regulation what must be done through legislation.”

The Final Rule was to take effect January 1, 2015. Among other things, it would have required most employers of home care workers to pay their employees overtime compensation for all hours worked over forty hours in a work week at one and one-half times the employees’ regular pay rates.

Judge Leon’s decision raises many questions:

Is this decision law outside the District of Columbia? And, does it apply in New York State?

If the DOL appeals this decision to the District of Columbia’s U.S. Court of Appeals, how soon can an appeals court decision be expected?

If the appeals court were to overturn Judge Leon’s decision, would the effective date of the Final Rule revert to January 1, 2015, the effective date the DOL set for the Final Rule, or would it be effective as of the date set by the appeals court?

What should home care agencies in New York do now to comply with their wage and hour obligations under the NYS Wage Parity Act as well as the federal Fair Labor Standards Act?

If you have any questions regarding this Alert or would like our advice on your home care agency’s particular facts and circumstances, please contact the author, Stephen Zweig, Partner in FordHarrison’s New York City office, who has counseled and defended home care agencies for over 35 years, at szweig@fordharrison.com, or the FordHarrison attorney with whom you usually work.

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