The company found a creative way to pay overtime – without it actually costing more
A federal appeals court ruled on April 1 that third-party home care employers must pay overtime – and the DOL has the authority to make them.
The U.S. Court of Appeals for the Sixth Circuit sided with the Department of Labor in an enforcement action against Americare Healthcare Services, Inc., and its owner, Dilli Adhikari, over unpaid overtime for home care workers in Ohio. The decision affirms that a 2013 DOL regulation stripping third-party employers of key overtime exemptions under the Fair Labor Standards Act remains valid – even after the Supreme Court rewrote the rules on agency power in 2024.
The case traces back to October 2021, when the DOL sued Americare for failing to properly compensate its home care workers between October 2018 and October 2021. Americare operates exclusively in Ohio, providing services to elderly or disabled clients through state Medicaid waiver programs. All of its workers are live-in caregivers, and between 95 and 99.9 percent of them are employed to care for their own family members. The company serves a specific population of Nepali Ohioans who, based on cultural and religious beliefs, are unlikely to accept care from anyone other than a close family member.
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.
The court also leaned on the Supreme Court's 2007 decision in Long Island Care at Home, Ltd. v. Coke, which held that deciding whether third-party employers fall within the exemption is precisely the kind of detail Congress told the DOL to work out. The Sixth Circuit rejected Americare's claim that Loper Bright had wiped out Coke, noting that the Supreme Court explicitly said its ruling did not disturb prior cases decided under the old framework.
Judge John K. Bush concurred in the result but wrote separately to flag what he sees as a deeper problem. He agreed that Coke controls the outcome but said he believes Coke was wrongly decided. In his view, the DOL's power to define statutory terms does not extend to barring an entire category of employers from claiming an exemption. He called the DOL's shift from its original 1975 position a troubling example of agency flip-flopping, writing that for almost forty years, third-party employers relied on the scope of the exemptions as they were – and were then precluded from seeking them.
Bush also raised questions about whether broad grants of rulemaking authority, like the one Congress included in the 1974 FLSA amendments, should be treated as permission for agencies to make substantive, binding rules at all. He suggested that Loper Bright should push courts to draw sharper lines around what agencies can and cannot do.
The court also found that Americare lacked standing to challenge the DOL's narrowed definition of companionship services, since the company's overtime obligations stem from the third-party regulation itself, not the definition.
The district court had found Americare and Adhikari liable for willful overtime violations. That finding was not appealed.
For HR professionals – particularly those managing workforces in home care, healthcare staffing, or any industry reliant on FLSA exemptions – the message from the Sixth Circuit is straightforward: the DOL's overtime enforcement tools survived the post-Chevron shakeup, and employers should not bet on court challenges to roll them back.
