DOL Won't Fully Enforce Final Regulation On Wages, Overtime Protections Until 2016

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By Gayle Cinquegrani

Oct. 7 — The controversial rule that extends federal minimum wage and overtime protections to an estimated 2 million home-care workers won't be enforced fully until 2016, the Labor Department announced Oct. 7.

The rule still will take effect Jan. 1, but the DOL won't bring enforcement actions for six months, from Jan. 1 to June 30, the agency said in a policy statement published in the Oct. 9 Federal Register (79 Fed. Reg. 60,974).

Under this “time-limited non-enforcement policy,” the DOL said, from July 1, 2015, to Dec. 31, 2015, the department “will exercise prosecutorial discretion in determining whether to bring enforcement actions.” In deciding whether to prosecute, the DOL said, it will give “particular consideration” to “the extent to which States and other entities have made good faith efforts to bring their home care programs into compliance with the FLSA since promulgation of the Final Rule.”

The department said it will continue extensive outreach and technical assistance efforts during the 12 months the limited enforcement policy is in effect.

In its policy statement, the Labor Department said it has received requests to extend the rule's effective date from the National Association of Medicaid Directors, the National Association of Directors of Developmental Disabilities Services, the National Association of States United for Aging and Disabilities, and several states and organizations representing disability advocates.

Paraprofessional Group: Delay Bad for Workers

The Paraprofessional Healthcare Institute is “disappointed by the Obama Administration's decision,” PHI President Jodi M. Sturgeon said in an Oct. 7 statement.

“The decision to delay means that 2 million home care workers—largely low-income women, and disproportionately women of color—will have to wait as long as another 12 months to receive even the most basic labor protections, guarantees that most other American workers take for granted,” she said. “Home care workers earn near poverty wages, averaging $9.50 per hour; one in five live in households with incomes below the federal poverty level; and more than half rely on public assistance like Medicaid and food stamps to make ends meet,” Sturgeon said.

“It is far past time for states and providers to take the actions needed to implement these rules. States have had 15 months to prepare for the implementation of the new Department of Labor rule,” she said. “Where states recognized the need to act—for example, in California and New York—they have found solutions. Notably, these two states are home to the country's largest Medicaid home and community-based services programs, and state officials have been able to make reasonable adjustments to meet the needs of both workers and consumers,” Sturgeon said. “Other states must use the time afforded by the delay in enforcement to make the necessary budget commitments and program adjustments to ensure compliance by June 2015.”

PHI was one of 41 workers advocacy, civil rights and women's groups who sent a Sept. 29 letter to Perez urging him to implement the new rule in January, as planned. They asserted that the rule, which was published Oct. 1, 2013, has had “an unusually long 15-month phase-in period.”

Senators Want Rule Suspended

After the enforcement delay was announced, Sens. Lamar Alexander (R-Tenn.) and Mike Johanns (R-Neb.) renewed their call for the DOL to suspend the rule. “This announcement is further proof that this rule was misguided from the get-go and should be scrapped, as we requested,” Johanns said. “Even with the delay, this rule could disrupt care for senior citizens and individuals with disabilities by dramatically increasing costs for in-home care services.”

On Sept. 30, Alexander and Johanns and 22 other Republicans sent a letter to Labor Secretary Thomas Perez warning that state Medicaid programs haven't been given adequate time or instruction on how to implement the rule and calling on DOL to suspend its implementation. The senators said the rule could “result in sudden increases in institutionalized care, which is often more costly and frequently covered by taxpayer dollars.”

Rule Applies FLSA to Most Home-Care Workers

The rule will apply the Fair Labor Standards Act to most home-care workers. All home-care workers, including live-in workers, who are employed by a third party such as a home health-care agency will be covered, regardless of their job duties. The rule also will apply to workers who are employed directly by the consumer or consumer's family and who primarily perform medical duties or domestic duties that benefit other household members.

Only workers who are employed directly by a consumer or consumer's family and who provide companionship services will be exempt from the FLSA's minimum wage and overtime provisions. Companionship activities include playing cards, visiting with neighbors and taking walks.

Since publishing the rule, DOL's Wage and Hour Division has issued two administrators' interpretations to clarify specific issues that could arise. In April, it issued Administrator's Interpretation No. 2014-1 to explain the requirements for home care providers in shared living quarters in which older adults or people with disabilities live with the people who provide home care services.

In June, the WHD issued Administrator's Interpretation No. 2014-2 to clarify the effect of the new home care workers rule on public entities in Medicaid-funded programs.

The rule has ignited strong interest, generating more than 26,000 public comments when it was first proposed in December 2011.

To contact the reporter on this story: Gayle Cinquegrani in Washington at gcinquegrani@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

Text of the policy statement is available at http://op.bna.com/dlrcases.nsf/r?Open=gcii-9pns8r.

The senators' letter may be accessed at http://www.johanns.senate.gov/public/?p=PressReleases&ContentRecord_id=167f591d-f634-4afd-9e50-791c5fbfbc89.