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Judge Rebukes Labor Department’s ‘Arrogance’

WASHINGTON (CN) - The Labor Department seized "unprecedented authority to impose overtime and minimum wage obligations" on employers that have been exempt for over 40 years, a federal judge ruled.

Though Congress expanded coverage under the Fair Labor Standards Act to domestic service employees in 1974, certain types of that work have always remained exempt, the Monday decision emphasizes.

Third-party providers of home care services are one such segment that enjoyed the exemption from having to pay either a minimum wage or overtime wages to employees who provide domestic companionship services to seniors or individuals with disabilities, U.S. District Judge Richard Leon wrote.

Overtime has also never been a right of live-in domestic service employees, Leon added.

After the U.S. Supreme Court upheld the exemptions in the 2007 case Long Island Care v. Coke, legislators introduced six bills into Congress, "yet there was never sufficient support to get any of them to the floor of either house," according to the ruling.

"Undaunted by the Supreme Court's decision in Coke, and the utter lack of congressional support to withdraw this exemption, the Department of Labor amazingly decided to try to do administratively what others had failed to achieve in either the judiciary or the Congress," Leon wrote.

On Oct. 1, 2013, the department published a final rule removing the exemption and forcing home care providers not directly hired by patients to provide their employees with the same minimum wage and overtime protections as other employers under the FLSA.

Leon's order ensures, however, that the rule will not take effect on Jan. 1 as planned.

"Congress included the exemptions for a reason, and the Supreme Court's decision in Coke not only does not empower the Department to gut them, it does not grant the Department judicial cover for what can only be characterized as a wholesale arrogation of Congress's authority in this area!"

Three trade associations that represent businesses employing workers currently subject to FLSA exemptions for companionship services or domestic service brought the challenge to the rule in Washington. These groups are the Home Care Association of America, the International Franchise Association, and National Association for Home Care & Hospice.

"Congress has clearly spoken on this issue, and the department's new, conflicting rule therefore cannot survive," Leon wrote.

The lack of congressional intent to withdraw the third-party employer exemption was "unequivocal," he added.

"The fact that the department issued its notice of proposed rulemaking after all six of these bills failed to move is nothing short of yet another thinly-veiled effort to do through regulation what could not be done through legislation," the opinion concludes. "Such conduct bespeaks an arrogance to not only disregard Congress's intent, but seize unprecedented authority to impose overtime and minimum wage obligations in defiance of the plain language of Section 213. It cannot stand."


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