6.13.07

Client Bulletin #375 - For PDF version of this Client Bulletin, click here

The Supreme Court has unanimously held that home health care workers providing companionship services are exempt from the FLSA’s minimum wage and overtime provisions as “domestic service employees,” regardless of whether they are employed by third-party agencies. To see a copy of the decision in   Long Island Care at Home, Ltd. v. Coke, click here. The decision reversed a prior ruling of the U.S. Court of Appeals for the Second Circuit (Connecticut, New York, and Vermont) which had held that the exemption did not apply and that the minimum wage and overtime requirements of the FLSA did.

The lengthy litigation, which involved two trips to the Court of Appeals and an intervening petition to the Supreme Court, was premised upon the plaintiff’s direct attack on the validity and enforceability of regulations and interpretations promulgated by the Wage and Hour Division of the U.S. Department of Labor. The FLSA exempts from its minimum wage and overtime provisions those engaged in “domestic service employment” and “companionship services.” Under regulations issued by the Department of Labor, employees of third-party agencies who perform in-home companionship services for the aged or infirm are subject to this exemption, which means that such employees are not entitled to overtime pay under the FLSA, even if they work more than 40 hours in a workweek.

The Supreme Court’s decision focused primarily on issues of administrative law and the level of deference that courts should give to agency interpretations of statutes that they are charged with enforcing. While acknowledging that the Labor Department’s regulatory history with respect to the statute in question had been somewhat inconsistent over the years, the Supreme Court ultimately concluded that the Labor Department had properly fulfilled the regulatory duties that had been delegated by Congress.  Justice Breyer, who wrote the opinion, said, “The statutory language refers broadly to ‘domestic service employment’ and to ‘companionship services.’  It expressly instructs the agency to work out the details of those broad definitions.  And whether to include workers paid by third parties within the scope of the definitions is one of those details.”

The Labor Department, of course, applauded the Supreme Court’s decision as upholding its longstanding enforcement position that the exemption applied broadly, regardless of whether the worker was employed by a third-party agency.  Taking a contrary view, Senator Edward M. Kennedy (D-Mass.), who chairs the Senate Committee with jurisdiction over the FLSA, issued a statement suggesting that the ruling was unfair to home health care workers, and promised to seek to correct the situation through legislative means.

If you have any questions about the applicability of federal or state minimum wage or overtime requirements to your company, please contact any member of Constangy's wage and hour practice group, or the Constangy attorney of your choice.

Constangy, Brooks & Smith, LLC has counseled employers, exclusively, on labor and employment law matters since 1946. The firm represents Fortune 500 corporations and small companies across the country. More than 100 lawyers work with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Georgia, South Carolina, North Carolina, Tennessee, Florida, Alabama, Virginia, Missouri, and Texas. For more information about the firm's labor and employment services, visit www.constangy.com, or call toll free at 866-843-9555.

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