ISSUES
FACT SHEET
Long Island Care at Home & Osborne vs. Evelyn Coke
Constituencies Perspectives
A. Employer Perspective
Employers faced with any potential legislation aimed at bringing home care workers employed by home care agencies under Fair and Labor Standards regulations related to minimum wage and overtime pay would strongly resist it. They would argue that the home care industry would be put out of business. The Medicaid rates would be subject to heated dispute because home care agencies would argue that the reimbursement rates are too low for home care agencies to afford overtime pay. Employers would also focus on the potential of countless numbers of elderly without essential home care services.
B. Consumer Perspective
The biggest fear by elders and persons with disabilities is the possibility that home care would become more scarce if home care agencies go out of business and the costs for providing home care go up without additional funds. The fear is that suddenly thousands of elders and persons with disabilities would be without care and many would need to go into nursing homes because home care has become even more scare and too expensive to afford. Supreme Court Justice Breyer illustrates this fear in his questioning of Evelyn Coke’s attorney during the Supreme Court’s oral argument session in the case. See highlighted words by Justice Breye below:
JUSTICE BREYER: Did Congress intend to cover, which I guess is a growing situation, that there is an old woman or man and they're very sick and they live in their house, there's only one way to keep them from having to go to an institution. Their children hire a companion to look after them. Now, that's a third party.
EVELYN COKE’S ATTORNEY: Your Honor, that question has been posed by some of the amici and it is a good question, but not the question before you.
JUSTICE BREYER: Because?
EVELYN COKE’S ATTORNEY: And I submit that if the Department construed section 552.3 to say when our words say "employed by the household" that could include a broader notion of the household, for example a son or daughter living outside the household, that might be a permissible construction of the Department's own regulation. But the construction which simply takes those words --
JUSTICE BREYER: It doesn't say that. It says "about, in or about a private home of the person by whom he is employed." I live in San Francisco. My mother lives in Massachusetts. Now, if I hire a companion to live in Massachusetts, that companion does not work about a private home of the person, me, by whom she is employed. So if we're being literal and if you win this case, I don't see how -- and I'm worried about this, obviously -- however -- and I think it's probably very common, that all over the country it's the family, the children, the grandchildren, an aunt, an uncle, maybe a good friend, maybe they're not even related, who is paying for a companion for an old, sick person so they don't have to be brought to an institution.
And if you win this case, it seems to me suddenly there will be millions of people who will be unable to do it and, hence, millions of sick people who will move to institutions. Now, if I were to say that that isn't totally a legal point, it is of course a legal point because it's a question of what people intended, but a worrisome point, I would be telling the truth. It is a very worrisome point.
FACT SHEET
Long Island Care at Home & Osborne vs. Evelyn Coke
1. What are the main facts of the case?
Evelyn Coke was a home care worker for 20 years. Her employer, Long Island Care at Home, a small home care agency employing about 50 home care workers paid her below minimum wage and denied her overtime pay.
2. What law permits employers to deny overtime and minimum wage?
When Congress enacted the Fair Labor Standards Act (FLSA), it exempted, among others, “domestic workers” and workers that provide “companionship services” to “individuals who “because of “age or infirmity) are unable to care for themselves.” The Department of Labor applied this exception to home care agencies employing workers that provide care in people’s homes. 29 CFR § 552.109 (a).
Ms. Coke filed a lawsuit challenging the exception under the law, and the Department’s interpretation of it. After Ms Coke won in federal court, the Department of Labor issued an “advisory memo” restating its view and asked the Supreme Court to enforce its rule.
3.What did the Supreme Court Decide?
The Supreme Court decided that the Department of Labor’s interpretation of the congressional law is valid. In doing so, the court reaffirmed what has been the status quo since the inception of the FLSA; namely, direct care workers working in people’s homes are exempted from minimum wage and overtime protections even if these workers are employed by an agency to perform such work. The difference is that most states do in fact pay the basic minimum wage. States are, in fact, free to set wages that go beyond the minimum wage and states can provide more protection than the Federal law provides.
4. What has changed in regard to national or state policy because of the Supreme Court’s decision?
Nothing. The status quo remains in place.
5. What does the Supreme Court decision accomplish?
The Supreme Court decision reminds us of the cold harsh reality that our long-term care system is under-funded and unfair. Consumers, direct care workers, and employers each struggle to receive, provide or perform care without adequate resources.
It is a strong reminder that we need to focus all of our energy on forming a strong coalition to bring every constituent together and advocate for substantive reform through these collaborative coalitional and worker association efforts.
6. What advocacy options are available?
There are no easy solutions and any strategy will take time. This is indeed a signature issue that the DCA can use to build coalition support among all three constituents because it will take a great deal of effort to make the necessary changes. It is a funding issue, but it is also a values issue. As John Booker, pointed out, the term “companionship” grossly misrepresents the health care goods and economic value that home care workers provide to our elders, seniors and consumers, not to mention our long-term care system.
Three strategies are available for advocacy:
A. National Legislative Change
To be effective, any national legislative effort may need to wait for a new White House administration.
B. State legislation (in states not offering higher protections)
At the state level, worker associations should determine where their state stands on the home care worker issue. As Steven Dawson pointed out, some states in fact offer higher protections than what the federal rules provide for. State associations can take this issue on and work to ensure that their states do not follow the federal rule. For example, Wisconsin does offer better protection for workers than the FLSA. Two years ago, there was an effort in the legislature to change Wisconsin law to parallel the FLSA for home care agencies, but the governor vetoed it due to concerted advocacy by consumers and workers.
C. Working directly with the Department of labor.
One last option that has not been discussed is contained in the Supreme Court’s decision: Engaging the Department of Labor to begin the process of enlightening public policy leaders and starting an effort to change the Court’s view on home care and direct care as a whole.
The Supreme Court’s decision is solely based on its principle of giving deference to how federal agencies decide to implement generally worded laws and “fill gaps” left in legislation. Here, the Supreme Court relied heavily on an “advisory memorandum” issued by the Department of Labor after Ms. Coke had won her lawsuit! The Supreme Court used mainly the Department of Labor’s “Advisory Memo” to support its decision.
It is hard to say if the Department of Labor issued the memo to stem the very real economic impact that authorizing overtime pay for the thousands of home care workers across the country would have on the home care industry and the consumers that receive these services. It is likely that small employers and the consumers that receive these services would have to cut services drastically unless states and counties step in with substantial additional funds to continue the services.
We all know that home care workers are indeed working overtime, but are not getting paid for it. It is also true that state budgets are stressed for funds and those consumers in many states are on waiting lists for services.
7. What impact would authorizing overtime pay have on the long-term care system?
First, the employer in this case was paying less than minimum wage! This is rare. Most providers do pay minimum and in many instances more than the minimum wage, though not enough to make home care a family sustaining job.
8. What would authorizing overtime pay do the system from each constituent’s perspective?
Consumers rely heavily on the overtime exception to receive care. States rely heavily on this loophole to provide care to more elders and persons with disabilities than it could otherwise fund. A sudden order to pay overtime pay without increasing the state budgets would likely lead to consumers losing services. In addition, many states have waiting lists that number in the hundreds or even thousands of consumers in need of home care services.
More information can be found here: http://directcarealliance.blogspot.com/2007/08/united-states-supreme-court-rules-that.html
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