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Supreme Court: Home-Care Workers Get Overtime

Supreme Court Chief Justice John G. Roberts signed an order paving the way for two million home-care workers to be eligible for minimum wages and overtime pay.

Home-care is the fastest growing occupation in the U.S., with America’s aging baby boomer generation leading to a spike in demand for home care workers for the elderly, chronically ill, and disabled.

The $84-billion-per-year industry is also one of the lowest-paid occupations in the nation, with a the median annual wage for the America’s nearly two million home-care workers making about $10 an hour, or about $21,000 per year, according to the U.S. Department of Labor’s most recent data.

Federal Law since 1974 had exempted home care workers hired through third-party staffing-agencies from wage and overtime requirements. Unable to convince Congress to revisit the issue, the Obama Administration directed the U.S. Labor Department to issue new rules requiring minimum wage and overtime in a blatant constitutional challenge to congressional authority.

A coalition of home-care industry plaintiffs sued and obtained a restraining order on implementing the rules while they sued the Labor Department. A federal judge ruled earlier this year that the executive branch had overstepped its authority.

But the U.S. Court of Appeals for the District of Columbia Circuit on August 21, in a huge precedent-setting ruling said the Labor Department has the power to interpret the law to change that exemption. .

Writing for the three-judge panel, Judge Sri Srinivasan cited a dramatic transformation of the home care industry over the past four decades as a valid reason for the change. While most caregivers used to be directly employed by individual households, the vast majority of workers now work for staffing companies that service hundreds or thousands of customers.

The court also indicated that the massive shift to providing care for the elderly in their own homes rather than in nursing homes requires workers to offer more advanced medical care and assistance to clients than what were deemed as “companionship” in 1974.

The industry groups essentially asked the Supreme Court to stay the ruling, arguing that the new rules would lead to the loss of home care for millions of elderly and disabled individuals.

But Chief Justice Roberts, who handles emergency filings from the D.C. Circuit, denied a request for a temporary delay and the new Labor Department rules extending minimum wage and overtime rules will go into effect on Tuesday, October 13.

The industry groups had said they would be filing a full Supreme Court appeal to challenge the Labor Department rule changes. Chief Justice Roberts’s order does not necessarily mean that such an appeal would be turned away, but one of the factors in used in determining if a delay of a lower court order is warranted is if the Supreme Court is likely to take up the issue.

President Obama in June announced another set of rules that would make another five million workers eligible for overtime pay if they work more than 40 hours per week. Under the latest rules, salaried employees earning less than $50,440 a year would be eligible for overtime, up from the previous threshold of $23,660 a year.

The new rules do not apply to home-care workers who are hired directly by patients or their families, but only to those who are employed through businesses.

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