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Federal Judge Guts DOL Home Care Rule

January 16, 2015

In a dramatic blow to the U.S. Department of Labor's Final Home Care Rule (commonly referred to as the companionship exemption), today a federal district court  issued an order vacating the narrowed definition of "care activities" that was to take effect January 1, 2015. This decision follows the court's earlier ruling that struck down the third party employer prohibition. The court's 13 page decision is attached to this post.

As we reported previously, on December 22, 2014, Federal District Court Judge Leon issued an opinion and order in the case of Home Care Association of America v. Weil (Case No. 14-cv-967) which vacated the part of the Department of Labor (DOL) Home Care rule that prohibits third-party employers from availing themselves of the companionship exemption. The court determined that the DOL acted beyond the authority delegated to it by Congress by promulgating regulations that were contrary to the statutory language and Congressional intent.

On New Year's Eve, the court issued a temporary restraining order staying the portion of the rule that defines "care activities" (and limits such activities to no more than 20% of the total number of hours worked per week), pending a hearing on that piece of the litigation. The hearing took place last Friday and today the court issued its ruling that the DOL also lacks the authority to change the definition of care activities.We understand the record keeping provisions of the law remain in effect - we will be releasing a more comprehensive analysis of the decision shortly.

We anticipate an appeal will be filed by DOL, and we will continue to keep you fully apprised of any developments. As this challenge to the rule works its way through the court system, providers should consult counsel familiar with federal law as well as state and local law in their jurisdiction to properly assess ongoing compliance obligations under the Fair Labor Standards Act.

ANCOR has consistently advocated, in conjunction with numerous disability organizations and national associations, for a much longer delay in implementation of the rule in order to allow states and providers necessary time to modify funding structures to ensure compliance without sacrificing quality of service to people served.

As ANCOR members will recall, ANCOR's advocacy resulted in DOL's issuing very favorable industry first guidance related to the shared living/host home independent contractor model. This ruling does not impact that guidance. As a resource to members, ANCOR released, in conjunction with the National Association of State Directors of Developmental Disabilities Services (NASDDDS) and the National Association of States United for Aging and Disabilities (NASUAD), a model contract for independent contractor models of host homes/adult foster care/shared living which is available on our website.