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Court Says Home Care ''Companions'' are Entitled to Minimum Wage, OT
September 19, 2006
Late last month, the U.S. Court of Appeals for the Second Circuit ruled that a federal regulation exempting home care agencies from Fair Labor Standard Act (FLSA) requirements when their employees are ''companions'' was invalid. The ''companionship exemption,'' in place since 1975, relieved third-party employers of the minimum wage and overtime compensation requirements that otherwise would have applied.
The outcome of this case, Evelyn Coke v. Long Island Care at Home, Ltd., and Maryann Osborne, is still uncertain, as another petition for a hearing by the U.S. Supreme Court is expected.
The Court of Appeals had made the same decision in its 2004 ruling. That decision was sent back to the appeals court by the U.S. Supreme Court in response to a memorandum filed by the U.S. Department of Labor. The DOL contended that the exemption was a ''legislative'' rather than ''interpretive'' rule, thus giving it more legal authority. The Court of Appeals rejected that contention.
The decision currently affects only third-party home care employers in the Second Circuit (New York, Connecticut, and Vermont) that employ aides in companionship situations. It is estimated that it affects tens of thousands of northeastern home care workers, primarily in New York. In New York City alone, the ruling would affect about 30,000 workers in the city's Medicaid-funded personal care program, increasing the cost of the program by an estimated $263 million unless overtime were managed.
Providers argue that paying home care aide workers overtime compensation will be bad for consumers, as it would force agencies to charge more for services or to limit the hours that aides work. However, AARP, which filed an amicus brief in this case, contends that requiring overtime and minimum wage pay to home care workers will ensure better care by improving conditions that lead to workforce shortages.
Hadas Thier
Paraprofessional Healthcare Institute
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