(Story updated at 5:45 p.m. ET.)
The U.S. Supreme Court decided Monday it will not hear a case challenging a new Labor Department rule that required higher wages for many home healthcare workers—meaning the rule will stay in place.
The case, Home Care Association of America, et al. v. Weil, centered on whether the new rule should be allowed to require third party employers, such as home-care agencies, to pay minimum wages and overtime to more workers.
The industry argued the rule would raise the cost of care for patients, making care less attainable and destabilizing the industry. Employee advocates, however, say the rule, which only applies to workers employed by third parties such as agencies, would help workers and the industry in the long run.
Sarah Leberstein, with the National Employment Law Project, praised the decision Monday saying that “stabilizing worker income and improving standards will ease the tremendous burnout and turnover” that hurts the industry and patients.
William Dombi, a vice president at the National Association for Home Care & Hospice, one of the groups involved in the case, called Monday's decision “disappointing” but he emphasized the efforts will continue to “protect the home care consumer who we think is the primary victim of all this.”
“What we have seen since the rule took effect in October is home care companies adjusting operations to avoid overtime and that comes primarily at the expense of the worker,” Dombi said.
Home healthcare agencies had already started paying their employees higher wages in recent months, after U.S. Supreme Court Chief Justice John Roberts refused a request (PDF) from the industry to delay a lower court's ruling upholding the rule.
Dombi said agencies would have no problem paying overtime if states boosted their Medicaid funding for such services to reflect the requirements of the new rule. Most states, however, have not boosted Medicaid funding. California, New York and Massachusetts are among the handful that have, Leberstein said.
Dombi said it's possible lawsuits may be filed against states if they don't put adequate Medicaid dollars behind the new requirements. He said industry groups are also interested in working with Congress to pass a tax credit to help patients better afford home healthcare. Also, he said, bills are already pending in the House and Senate that would undo the Labor Department rule. Those bills had been on hold while the Supreme Court decided whether to take the case.
Twelve states had filed a brief with the Supreme Court urging it to hear the case concerning the new rule, saying it imposes an unfunded liability on states.
In November, shortly after the ruling went into effect, Home Care Pulse conducted a survey of 444 home care providers. The company does research for the home care industry and helps them measure client satisfaction.
Nearly 68% of those who responded to the survey said they had cut caregiver hours to avoid overtime. More than 55% said they were rescheduling cases to avoid paying overtime. And more than half said they were raising fees to cover the additional costs.
Many workers, however, have cheered the changes.
Lisa Scott, a home care worker and leader of her local United Domestic Workers of America union, said during a call with reporters Monday, that she could barely get by before the rule. She made $10.40 an hour, working 56 hours a week. She said she helps three elderly women cook, shop, clean and pay their bills. Scott called it rewarding work, but said before the rule passed she could barely afford gas for her car.
Now, she said, she's making an additional $300 a month.
“I'll be able to meet my youngest grandson, something that was impossible until now because I didn't have the money for a plane ticket,” Scott said.