NEWS
08/21/2015 12:17 EDT | Updated 08/21/2016 01:12 EDT

U.S. court reinstates rules giving overtime, minimum wage to home care workers

WASHINGTON — A U.S. appeals court has reinstated Obama administration regulations that guarantee overtime and minimum wage protection to nearly 2 million home health care workers.

The ruling is a victory for worker advocacy groups and labour unions that have long sought higher wages for domestic workers who help the elderly and disabled with everyday tasks such as bathing or taking medicine.

It's also a win for the White House, which announced the rules four years ago as part of an effort to go around an unwilling Congress in a bid to help low-wage workers through executive action.

A federal judge had scrapped the Labor Department rules earlier this year after finding that the agency had overstepped its authority. Since 1974, federal law has exempted home care workers hired through third-party staffing agencies from wage and overtime requirements.

But the U.S. Court of Appeals for the District of Columbia Circuit said the Labor Department has the power to interpret the law to change that exemption.

Writing for a three-judge panel, Judge Sri Srinivasan cited a "dramatic transformation" of the home care industry over the past four decades as a valid reason for the change. While most caregivers used to be directly employed by individual households, the vast majority of workers now work for staffing companies that service hundreds or thousands of customers, Srinivasan said.

He also noted a massive shift to providing care for the elderly in their own homes rather than in nursing homes, which requires workers to offer more advanced medical care and assistance to clients than the mere "companionship" services envisioned in 1974.

Home health care companies employing many of the workers have said overtime requirements would make it tougher for families to afford home care for aging parents.

Lobbyists for the $84 billion industry argued that the new rules could even reduce the take-home pay of caregivers if companies decide not to send workers out for shifts longer than eight hours to avoid overtime pay.

In June, President Barack Obama announced another set of rules that would make another 5 million workers eligible for overtime pay if they work more than 40 hours per week. Under the latest rules, salaried employees earning less than $50,440 a year would be assured overtime, up from the previous threshold of $23,660 a year.

Sam Hananel, The Associated Press