Court Rejects Overtime Pay For Home-Care Workers

The Supreme Court ruled yesterday that workers in the fast-growing home-care industry are not entitled to overtime pay.

The court unanimously agreed that a 1975 Labor Department regulation exempting workers paid by third parties from minimum-wage and maximum-hour rules was a valid exercise of the power given to the agency by Congress.

The ruling was one of several business-related decisions from the court yesterday. The justices also ruled unanimously that Philip Morris Cos. could not move a class-action lawsuit from a state court in Arkansas to what companies often believe is a more friendly climate in the federal courts.

The lawsuit claims that Philip Morris fraudulently labeled its "light" cigarettes. The U.S. government and a large coalition of states had argued that the case should remain in state court.

The home-care case was brought by Evelyn Coke, a 73-year-old retiree who worked for more than 20 years as a home-care provider. She sued her employer, Long Island Care at Home, because she was never paid overtime despite her long hours and sometimes overnight care for clients.

She and her lawyers challenged the Labor Department exemption, saying its development at a time when Congress was including more workers under wage and overtime laws could not be what lawmakers intended.

But the Bush administration said Congress clearly had left the decision up to the agency. Otherwise, the administration contended, wage and overtime provisions for companionship services would have been applied in the law.

The court, in an opinion by Justice Stephen G. Breyer, agreed.

"Where an agency rule sets forth important individual rights and duties . . . and where the rule itself is reasonable, then a court ordinarily assumes that Congress intended it to defer to the agency's determination," Breyer wrote.

The decision set aside a ruling by the Court of Appeals for the 2nd Circuit that had allowed Coke's lawsuit to go forward.

Home-care workers make up one of the marketplace's fastest-growing occupations, the growth fueled by an aging population and a desire to keep more of the aged in their homes rather than in institutions.

Coke's supporters said the decision will make it even more difficult to find workers to take home-care jobs, which often are low-paying and come without benefits.