In the Sixth Circuit, a home care firm is challenging the verdict that it owes $15 million in overtime pay to live-in care providers. The firm is arguing the Department of Labor rule that was used to support the verdict is unlawful—challenging the agency’s authority to restrict a Fair Labor Standards Act overtime exemption for certain live-in services. The dispute involves a 2013 rule change that made certain third-party employers ineligible for the exemption (a marked change in the law, which all but upended the third-party employers’ business models). While the DOL is considering reverting the rule to its pre-2013 version, it is unlikely any such change would apply retroactively.
Business Takeaway: We’re continuing to see the impact of the Supreme Court’s decision on the “Chevron doctrine,” i.e., that courts need no longer defer to agency expertise. This specific circumstance underscores the importance of protecting yourself from regulatory swings by documenting classification determinations and periodic audits.