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Supreme Court Upholds FLSA Exemption for Companionship Services

    Client Alerts
  • June 22, 2007

Last week, the U.S. Supreme Court resolved a long-running battle involving overtime payments to certain employees in the home healthcare industry.  Under a Department of Labor regulation, persons employed by an outside agency qualify for the exemption if they provide companionship services to a client of their employer.  In Long Island Care at Home, Ltd. v. Coke, the Supreme Court unanimously decided that the DOL rule and the underlying overtime exemption are valid.  The plaintiff was an employee of the agency.  She sued for unpaid overtime, claiming that the statutory exemption to the Fair Labor Standards Act’s overtime obligation only applies to companionship services provided someone directly employed by the person receiving care or their family.  She contended that DOL overstepped its authority by expanding the exemption to employees of outside agencies.


The Court rejected this interpretation, and held for the employer.  In its decision, the Court found that the FLSA is unclear on its intent to cover outside agencies’ employees under the companionship services exemption.  In the absence of clear legislative intent, DOL has the authority to issue reasonable interpretations of the exemption.  The Supreme Court conceded that DOL had changed its view of this exemption over time, but concluded that the current interpretation makes sense, because it imposes a blanket rule rather than leaving open questions over exactly which direct employees would be exempt.  This decision grants assurance to this industry that qualified employees are not entitled to overtime pay.