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Latest on HCAOA Lawsuit against Department of Labor Over Companion Exemption Rule

On September 9, 2014, Federal attorneys from the Departments of Justice and Labor submitted a brief outlining the latest response in support of their Motion to Dismiss.  Specifically, DoL attorneys argued that the Secretary of Labor has authority to define the scope of the Fair Labor Standards Act (FLSA) companionship services and live-in domestic service worker exemptions, as explained by the Supreme Court in Long Island Care at Home Ltd. v. Coke. As stated in their response, "In creating these exemptions, Congress granted the Secretary broad general authority to prescribe "rules, regulations, and orders" implementing them, as well as explicit authority to "define and delimit" the scope of the companionship services exemptions." Further, they argue that the Secretary promulgated the regulations at issue in this case through notice-and-comment rulemaking, based on his determination that the existing regulatory provision regarding third party employment in the domestic service context was outdated. Finally, they conclude that because the Secretary filled a statutory gap through notice-and-comment rulemaking and did so in a reasonable manner, the plaintiffs' challenge should fail, and the Court should dismiss Counts I and II of plaintiffs' complaint or grant summary judgment on those Counts in the defendants' favor. 

HCAOA had previously submitted a brief in response to an original Motion to Dismiss filed by attorneys representing DoL. Our response among other arguments, outlined the DoL's failure to reconcile the Rule with the legislative history of the FLSA and provide an adequate justification for the Department's reversal of its longstanding enforcement of the FLSA exemptions. The brief emphasized that the DoL has arbitrarily ignored or improperly discounted the facts underlying the prior policy of exempting home care companion and live-in services. Further, we argued that the Rule capriciously undermines the intent of Congress to encourage deinstitutionalization of care, control costs of care, and maintain continuity of care for a longer number of hours each day. Substantial evidence in the record strongly indicates that each of these factors will be adversely impacted by the Rule. We concluded that the "...Court should find that the Department has failed to justify the new Rule with substantial evidence in the record as a whole, and the new Rule must be found to be arbitrary and capricious as a result." 

Background

HCAOA is serving as the named plaintiff with two other organizations - the International Franchise Association, and the National Association For Home Care & Hospice in a filed lawsuit against the DoL, seeking declaratory and injunctive relief for the Department's violation of Federal law relative to the Department's issuance of the FLSA companion care exemption final rule. HCAOA affirms that the changes to the FLSA companion care exemption threaten the home care industry's ability to provide quality care to seniors and individuals with disabilities. We anticipate the court will schedule oral arguments as the next step in the proceedings. We will continue to keep you updated as we move forward with the litigation.

$10.2 Million Awarded to Fund Worker Misclassification Detection, Enforcement Activities in 19 States 

The DoL recently awarded $10.2 million to 19 states (see chart below) to implement or improve worker misclassification detection and enforcement initiatives. The federal grant awards will enhance states' ability to detect incidents of worker misclassification and protect the integrity of state unemployment insurance trust funds according to the DoL Secretary Thomas E. Perez. 

The funds will be used to increase the ability of states to identify instances where employers improperly classify employees as independent contractors or fail to report the wages paid to workers at all. The states that were selected to receive these grants will use the funds for a variety of improvements and initiatives, including enhancing employer audit programs and conducting employer education initiatives. While several states have existing programs designed to reduce worker misclassification, this is the first year that the DoL has awarded grants dedicated to this effort. 

The Consolidated Appropriations Act of 2014 authorized this grant funding for "activities to address the misclassification of workers." Under an innovative, "high-performance bonus" program, four states will receive a share of $2 million in additional grant funds due to their high performance or most improved performance in detecting incidents of worker misclassification. The remaining $8,225,183 was distributed to 19 states in competitive grants. The maximum grant available under the competitive grant award process was $500,000. 

In addition to grant funding, the U.S. Department of Labor has developed a Worker Misclassification Initiative with a number of states to address this  issue. To find out whether your state is participating in this initiative click HERE.

FedEx Ruling Draws Further Attention to Worker Misclassification Issue

In a recent court decision with ramifications for businesses operating under an independent contractor system, a panel of judges from the Ninth Circuit Court of Appeals asserted that FedEx maintains control over the work despite operating under an independent contractor model.  For more information read the decision HERE. This decision provides further scrutiny with regard to worker misclassification policy at the federal and state level. 

Recently, HCAOA endorsed two federal bills that would strengthen the hand of the U.S. Department of Labor and Internal Revenue Service to address misclassification of workers as independent contractors. These bills include the Payroll Fraud Prevention Act of 2013 (S.1687), introduced by Senator Bob Casey (D-PA), and the Fair Playing Field Act of 2013 (S.1706), introduced by Senator Sherrod Brown (D-OH).

International Business Coach Donald Cooper is back again!

"The single best keynote speaker I have ever seen.  Funny, insightful, motivating and creative.  Donald is the Canadian "Lewis Black!"

"Excellent session, very good speaker! Highly informative!"

"Exceptional!  Exactly what I needed to refocus."

These comments are just a sampling of the numerous testimonials received from members who attended the keynote address presented by International Business Coach, Donald Cooper at the 2013 HCAOA Leadership Conference.  Click HERE to watch a clip of Donald's 2013 presentation! 

After the overwhelming response to his presentation last year, Donald has been invited to address our members once again with his presentation, "Winning the Talent War!"  Review this informative keynote description HERE.

Drawing from his real-life experience as a world-class manufacturer, retailer and business coach, Donald now helps companies rethink and reinvent themselves to create compelling customer value, clarity of purpose and long-term profitability.  For his unique business content and compelling presentation style, Donald has been awarded the Certified Speaking Professional (CSP) designation, the highest earned designation in the world of professional speaking and he has been inducted into the Canadian Speaking Hall of Fame. His insights into how to sell more, manage smarter, grow your bottom line and have a life will inform you, challenge you, disturb you, inspire you...and leave you with a new and powerful understanding of your business, your customers and your life!

Don't miss this opportunity to learn from Donald Cooper and many other industry leaders!  Register for the 2014 Leadership Conference today! 

An Invitation to Attend the HCAOA Annual Business Meeting 

HCAOA Member Forum

Early this summer, HCAOA was pleased to announce the launch of one of our newest member benefits, the HCAOA Member Forum.  The Forum is the center of HCAOA's online community and serves as a communication tool that will allow members to ask questions of one another, discuss topics and post articles.  To access the Forum, members must log into their online account and navigate to the Members section of the website.   To view Forum content consistently, members must login into their account and navigate to the Forum section or simply "subscribe" to the Forum updates.  By subscribing to Forum updates, members will receive email notifications when new content is posted.