Home health workers entitled to same overtime, wages as hospital-based workers, court says

Home health workers employed by an agency are subject to the same minimum wage and overtime pay standards as those who perform similar services in a hospital, nursing home or other setting, according to an August 21 ruling by the U.S. Court of Appeals.

Home health workers employed by an agency are subject to the same minimum wage and overtime pay standards as those who perform similar services in a hospital, nursing home or other setting, according to an August 21 ruling by the U.S. Court of Appeals.

Three home health organizations argued that federal law exempts employees who work in the home from the minimum wage and overtime pay regulations.

The Home Care Association of America, the National Association of Home Care and Hospice and the International Franchise Association also said removing third-party-employed workers from the scope of the exemptions would make home care less affordable and create an incentive for institutionalizing the elderly and disabled.

This was not backed up by reliable data, according to the court.

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Fifteen states already offer minimum wage and overtime protections to all or most third party-employed home care workers, Judge Sri Srinivasan said.

"The industry's own survey indicated that home care agencies 'operating in overtime and non-overtime states already have very similar characteristics,' including 'a similar percentage of consumers receiving 24-hour care,'" Srinivasan wrote.

A nonprofit labor advocacy group applauded the Appeals Court decision.

"This is a tremendous victory for the two-million-plus home care workers in America who, for so many years, were unjustly shut out of our nation's basic wage and hour protections," said Christine Owens, executive director of the National Employment Law Project.

The federal Fair Labor Standards Act exempts  "domestic service" workers including those who provide "companionship services" and live-in services for the elderly, ill or disabled, from receiving minimum wage and overtime pay.

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However, the U. S. Department of Labor recently decided home health workers employed by a third party should receive the same pay standard as other healthcare workers.

The Appeals Court agreed.

In the 1970s when the Fair Labor Standards Act were enacted, professional primary care mostly took place at hospitals and nursing homes, according to the court.

Times have changed, Srinivasan said.

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"The growing demand for long-term home care services and the rising cost of traditional institutional care have fundamentally changed the nature of the home care industry," he said. "Individuals with significant care needs increasingly receive services in their homes rather than in institutional settings. Residential care is increasingly being provided by professionals employed by third-party agencies rather than by workers hired directly by care recipients and their families."

The Department of Labor's decision to adopt regulations giving home health employees the same federal protections afforded to their counterparts who provide largely the same services in an institutional setting is reasonable, the Appeals Court said in overturning a lower court ruling.

The court referred to the Supreme Court's 1984 decision in the Chevron case that held courts must defer to a federal agency's interpretation of the law as long as that interpretation is not unreasonable.

Twitter: @SusanMorseHFN