A federal three-judge panel gave few clues during oral arguments Thursday about which way they might lean in the battle over the Obama administration's effort to compel home healthcare providers to raise wages for many workers.
Lawyers for the government argued in court that boosting workers' pay would help workers and improve access to care. Attorneys for the home healthcare industry said the opposite: that requiring higher wages would destabilize the industry, leading to less in-home care and more institutionalization for the elderly and disabled.
The case centers on whether a U.S. Labor Department rule can require home-care providers to pay minimum wages and overtime to so-called companionship workers providing “fellowship, care and protection.” Such workers have long been exempt from minimum wage and overtime pay protection.
The regulations issued last year, however, would significantly narrow the definition of companions to those who spend no more than 20% of their time providing actual care, such as feeding and bathing. It would also no longer exempt companionship workers employed by third parties, such as home healthcare providers, from wage protections. Those changes would likely mean wage and overtime protections for a majority of home healthcare workers.
A U.S. district judge ruled in January that the Labor Department's rule violated the 1974 legislation that extended wage and hour protections to "domestic service" workers but carved out exemptions for babysitters and companions for the elderly and infirm.
Alisa Klein, an attorney for the government, sought to counter that conclusion during oral arguments before the U.S. Circuit Court of Appeals for the District of Columbia.
“The new rule would not merely help the workers, which is of course very important, but would also increase the availability and access to home care workers, and this is reiterating the type of reasoning that the congressional committees had in 1974 reports that accompanied the legislation,” Klein said.
But attorney Maurice Baskin, representing industry groups, said Congress did in fact intend to include many home healthcare workers in the exemption.
“They've taken an industry that was a great success story, to achieve exactly what Congress wanted, which was to allow people to no longer be institutionalized, to stay in their homes and get help, and now they are threatening to destroy it,” Baskin told the judges. Industry groups involved in the lawsuit include the National Association for Home Care and Hospice, the Home Care Association of America and the International Franchise Association.
The judges questioned both sides on a number of issues, including precedent set in other cases, the logic of the new rule and congressional intent. One of the legal issues in the case is whether the original law is clear or ambiguous and, if it's ambiguous, whether the Labor Department reasonably interpreted it when creating the disputed rule.
The judges also questioned the effect of the rule on live-in domestic workers. A lower court also vacated a part of the rule that would have required companies to pay overtime to live-in domestic workers.
William Dombi, co-counsel for the industry in the case and a vice president at the National Association for Home Care and Hospice, said the court gave both sides a full and fair opportunity to state their positions Thursday.
“In contrast to how things went at the district court level where it was pretty obvious where the judge was going … I don't think we have a firm kind of forecast as to where this thing will end up,” Dombi said. “Their questions indicated that they were exploring the case from top to bottom.”
Dombi said the industry doesn't oppose higher pay over time but rather believes “better compensation doesn't happen by simply one federal agency changing its rule.”
But Robert Espinoza, vice president of the Paraprofessional Healthcare Institute, which has been advocating for higher wages, said it's an important case because higher wages can lead to better employee retention and, in turn, better care.
The judges are expected to rule by the end of June. Dombi said if the industry groups lose, they will likely appeal to the U.S. Supreme Court.
