A U.S. District Court judge on Wednesday struck down another portion of regulations issued by the federal Department of Labor (DOL) that would have extended overtime and minimum wage to home health workers.

In 1974, the Fair Labor Standards Act (FLSA) – which requires employers to pay workers at least the minimum wage and extra pay for overtime hours – was expanded to cover domestic workers. However, an exemption was included for those who provide “care and fellowship” to the elderly and disabled in their homes. The exemption was interpreted to include home care workers employed by agencies and other third-party employers (i.e., In-Home Supportive Services (IHSS) employees).

In October 2013, DOL issued regulations making those home care workers paid by third-party providers ineligible for the above-mentioned exemption, thereby extending payment of overtime and minimum wage protections to that population. The regulations also narrowed the definition of “companionship care” to only apply to those who spend less than 20 percent of their time aiding clients in bathing, cooking their meals, managing their medications or performing other personal care services. This essentially broadened the number of home care workers eligible for overtime pay and minimum wage protections even further. Accordingly, the 2014-15 state Budget Act included a negotiated deal between the Brown Administration, Legislature and labor representatives to implement the federal overtime rules to apply to California’s IHSS workers as of January 1, 2015. The Administration had estimated the cost for complying with the regulations to be $403.5 million in 2014-15 and $707.6 million annually thereafter.

Almost immediately following the issuance of the DOL regulations, the agency was challenged in a lawsuit by the Home Care Association of America in an effort to block its implementation. In December 2014, the federal court ruled that the portion of the regulation that made home care workers paid by third-party providers eligible for overtime pay and minimum wage protections exceeded DOL’s authority and subsequently delayed implementation of the regulations. Under state law, California’s implementation of overtime was also delayed pending further action by the federal court. Wednesday’s action by the court striking the portion of the regulations that more narrowly defined companionship care put the nail in the coffin of the IHSS overtime discussion both at the state and federal levels.