JUDGE STRIKES DOWN DEPARTMENT OF LABOR REGULATION AS OVER-REACHING

aWheelchairNursingHomeIn a rebuke to the United States Department of Labor’s (“DOL”), a federal judge struck down October 2013 regulations that expanded over-time and minimum wage to all home-care workers as over-broadly and an “unprecedented” seizure of power Congress never intended to give to the DOL. This regulation would have guaranteed a national baseline for over-time and minimum wages to be paid under the Fair Labor Standards Act (“FLSA”) to home-care workers- including all home-care workers in Illinois.

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For over 40 years, third-party businesses that offer home care services to senior or disabled citizens have been exempt from having to pay their employees minimum wage or overtime under FLSA. In October 2013, however, DOL issued a new rule that took away these longstanding exemptions. In Illinois, these DOL’s regulations would have required third-party employers for the first time in 40 years to pay home-care workers over-time and minimum wages under FLSA, driving up the cost to both employers and the residents who hire home-care workers.

The decision sides with the Home Care Associates and trade groups that argued in its suit against the Department of Labor that the rule would have a “destabilizing impact” on the entire home care industry and adversely affect access to home care services for millions of elderly people.   In essence, the DOL regulation would have awarded extra pay to 2 million home-care workers nationwide. United States District Judge Robert J. Leon stated such a mandate can be done only through an act of Congress, holding “The Department is trying to do through regulation what must be done through legislation”. Judge Leon also held in his order that the DOL’s new rules are, “nothing short of yet another thinly-veiled effort to do through regulation what could not be done through legislation.” Ruling in favor of several business groups that sued the DOL, Judge Leon struck down the portion of the rules requiring third-party home care companies to pay minimum wage and overtime to workers employed mainly for “fellowship and protection.”

Following Judge Leon’s ruling striking down this home-care worker regulation, the State of California has decided it is not going to pay over-time and other related benefits under FLSA to state-employed home-care workers. According to the statistics from the California Department of Social Services, by not paying overtime and some related benefits, the state of California stands to save $183.6 million over the next six months and an additional $314.2 million in the fiscal year that begins July 1.

With 33,000 home-care workers in the greater Chicagoland area, requiring employers to pay over-time wages for home-care workers would have caused many Illinois senior citizens to pay significantly more for day-to-day care needs.

Should you have any questions about any law that may be effecting your business or would like to schedule a free initial consultation, please contact Waltz, Palmer & Dawson, LLC at (847)253-8800 or contact us online.

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