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Court vacates DOL third party domestic service employer regulation

December 23rd, 2014  |  Ron Miller

Determined to leave well-enough alone, a federal district court in the District of Columbia quashed the Department of Labor’s attempt to implement changes to the third party domestic service employer regulation that would have ended a 40-year old exemption from minimum wages and overtime pay. “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,” observed the district court in Home Care Association of America v. Weil.

Following passage of the 1974 Amendments, DOL promulgated implementing regulations. Those regulations focused on the employees and the nature of the employees’ services. The term “domestic service employment” refers to services of a household nature performed by an employee in or about a private home of the person by whom he or she is employed. “Companionship services” means “those services which provide fellowship, care, and protection for a person who, because of advanced age or physical or mental infirmity, cannot care for his or her own needs.” Finally, “live-in” workers are described as “domestic service employees who reside in the household where they are employed.”

The regulations further specify that the exemptions cover companions and live-in domestic service workers who are “employed by an employer or agency other than the family or household using the services.” That provision was upheld by the Supreme Court in Long Island Care at Home, Ltd. v. Coke, with the Court concluding that the third party rule was valid and binding. Subsequent attempts in Congress to overturn Coke and abolish this exemption failed.

Here, the court agreed with the Home Care Association that the exemption enjoyed by third-party employers over the past 40 years is not an open question and the DOL cannot manipulate its definitional authority in such a way as to effectively rewrite the exemption out of the law. If an employee’s work is encompassed within the statutory terms as defined by the regulations, the employer is not obligated to pay overtime and/or minimum wage. This is the natural reading of the statute, and there is no explicit—or implicit—delegation of authority to DOL to parse groups of employees based on the nature of their employer who otherwise fall within those definitions.