Sixth Circuit upholds DOL overtime rule against home care employer

The record showed that from October 2018 to September 2019, Americare paid its workers a consistent hourly rate with no overtime. This happened despite the fact that at least one attorney had advised Adhikari in early 2018 that he should pay overtime to Americare workers, and despite the fact that Adhikari was already paying overtime to his other employees at Intra-National Home Care. 

When Americare did begin paying overtime in September 2019, it did so by varying each worker’s hourly rate individually based on the number of hours they worked that week, then paying overtime according to the lower rate. The net effect was that each worker’s average hourly compensation remained the same, regardless of how many hours they worked. 

Americare’s defense centered on a challenge to the DOL’s 2013 regulation, which prevents third-party home care employers from claiming two long-standing FLSA exemptions: the Companionship Services Exemption and the Live-In Exemption. Before 2013, third-party employers could use these exemptions to avoid paying overtime to home care workers altogether. The DOL eliminated that option after concluding that the home care industry had fundamentally changed since the 1970s, when most elder care took place in nursing homes rather than private residences. 

Americare argued the regulation was invalid, leaning heavily on the Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo, which overturned the decades-old Chevron deference doctrine. The company essentially argued that without Chevron, the DOL no longer had the legal footing to enforce the rule. 

The Sixth Circuit was not persuaded. Writing for the majority, Judge Jane B. Stranch pointed out that Loper Bright did not touch the category of authority at play here: express delegation, where Congress specifically hands an agency the power to flesh out a statute’s terms. The FLSA does exactly that, directing the Secretary of Labor to define and set the boundaries of what counts as domestic service employment and companionship services. The Supreme Court itself, in Loper Bright, cited this very provision as an example of a valid express delegation.