Court Invalidates Rule Extending the FLSA’s Minimum Wage and Overtime Requirements to Home Health Care Workers Employed by Third Parties

By Brittany L. Hampton

The U.S. District Court for the District of Columbia struck down the U.S. Department of Labor’s regulations concerning the companionship services exemption to the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA). See Home Care Association of America v. Weil, No. 14-cv-967 (D.D.C. 2014). Under the FLSA, providers of home care services employed by a third party are deemed to fall within the FLSA’s domestic employee and/or companionship services exemptions. However, the Department of Labor’s Wage and Hour Division issued a Final Rule with an effective date of January 1, 2015 (but not to be enforced until July 1, 2015) effectively eliminating this exemption by revising the definition of “companionship services” and subjecting third-party providers to minimum wage and overtime requirements imposed by the FLSA.

The National Association for Home Care & Hospice, Home Care Association of America, and the International Franchise Association brought an action challenging the Final Rule under the Administrative Procedure Act arguing that the rule was arbitrary and capricious, and inconsistent with Congress’ intent. Specifically, the plaintiffs claimed the rule would “have a destabilizing impact on

Wage and Hour Division Releases Enforcement Statistics

By Michelle D. Wyrick

The U.S. Department of Labor’s Wage and Hour Division recently released enforcement statistics for fiscal years 2009 through 2013. Of particular note to employers, the Wage and Hour Division continues to process a high number of wage and hour complaints, with a particular focus on workers in low-wage industries. Conversely, the number of Family and Medical Leave Act cases has decreased over the last two fiscal years.

According to the enforcement statistics, in fiscal year 2013, the Wage and Hour Division collected approximately $250,000,000 in back wages in wage and hour cases. That number represents a small decrease from the back wages collected in fiscal year 2012 but is still the second highest amount collected since fiscal year 2004. In addition, the number of enforcement hours spent on wage and hour complaints has risen substantially over the last four fiscal years.

The statistics also highlight back wages recovered for workers in low-wage industries. These industries include agriculture, day care, restaurants, garment manufacturing, guard services, health care, hotels and motels, janitorial services, and temporary help. The number of cases filed against employers in low-wage industries continues to increase. Likewise, the amount of back wages recovered for workers in low-wage industries rose significantly during the last two fiscal years ($83,051,160 and $97,912,954, respectively).

Until there is a change in the administration, employers should expect the Wage and Hour Division to continue to emphasize enforcement of the Fair Labor Standards Act, with a priority on workers in low-wage industries.

President Obama Details Possible Cuts to Federal Spending under Budget Control Act of 2011

By Edwin S. Hopson

On September 14, 2012, the President’s Office of Management and Budget released a report on what the estimated impact of sequestration pursuant to Sequestration Transparency Act, as mandated by the Budget Control Act of 2011, would be on January 2, 2013, should the Congress not agree upon a budget or otherwise intervene prior to that time.  According to the report, it is estimated that, among other things, there would be a 9.4% cut in non-exempt defense discretionary spending and a 8.2% decrease in non-defense, non-exempt discretionary funding.  The nearly 400 page report details plans for cuts federal government spending amounting to some $1.2 trillion dollars.

In Appendix A to the report, the following agency cuts in selected labor/employment sectors are as follows:

U.S. Department of Labor Wage and Hour Division: $19 million

Occupational Safety and Health Administration: $46 million

Occupational Safety and Health Review Commission: $1 million

Office of Federal Contract Compliance Programs: $9 million

Equal Employment Opportunity Commission: $30 million

National Labor Relations Board: $23 million

These cuts, if implemented, would undoubtedly have significant impacts on these agencies.  It is assumed that each agency is preparing or has prepared contingency plans to deal with any such reductions in funding.