Long Island Care at Home, Ltd. v. Coke
Headline: Court upholds Labor Department rule exempting agency-hired companionship caregivers from minimum-wage and overtime protections, limiting pay claims by home-care workers employed through third-party agencies.
Holding: The third-party regulation is valid and binding, so companionship workers paid by third-party agencies fall within the statutory exemption and are not entitled to minimum wages and overtime under federal law.
- Makes many agency-hired home caregivers ineligible for federal minimum-wage and overtime claims.
- Affirms that DOL rulemaking (notice-and-comment) can settle coverage gaps.
- Leaves agencies and families responsible for caregiving arrangements without FLSA pay obligations.
Summary
Background
A home-care worker who provided companionship services to elderly and infirm people sued her former employer, a private agency and its owner, seeking unpaid minimum and overtime wages. The parties agreed the outcome turned on whether a Labor Department regulation treats companionship workers paid by third-party agencies as exempt from the federal wage-and-hour law’s protections. Lower courts split: a district court enforced the Department’s rule and dismissed the suit, while the court of appeals rejected the rule and set that judgment aside.
Reasoning
The Court explained that Congress left gaps in the law about how to define “domestic service” and “companionship services” and explicitly empowered the Labor Department to issue regulations filling those gaps. The Court found the Department’s rule, adopted after notice-and-comment rulemaking and defended in an internal advisory memorandum, to be a reasonable exercise of that gap-filling authority. The Court rejected the argument that a more general definition elsewhere in the regulations controlled, and it concluded the Department’s interpretation is entitled to judicial deference unless plainly wrong. The Court also held the agency provided adequate notice when it adopted the rule.
Real world impact
As a result, the regulation stands: many companionship caregivers hired through private agencies will be treated as exempt from federal minimum-wage and overtime protections unless the Department changes the rule or Congress acts. Employers, workers, and regulators will rely on the Department’s rule when deciding pay obligations and future regulatory revisions.
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