Court Backs DOL, Closes FLSA Loophole for Third-Party Home-Care Agencies
**Court Backs DOL: No FLSA Loophole for Third-Party Care Agencies**
A federal appeals court just slammed the door on home care agency WiCare’s bid to dodge minimum wage and overtime rules under the Fair Labor Standards Act, upholding a key Labor Department regulation and sticking the company with over $1 million in penalties. This non-precedential ruling reinforces agency power to interpret wage laws, but its crypto ripple? It spotlights the post-Loper Bright battlefield where courts scrutinize SEC and CFTC rulemaking on exemptions like crypto “companionship services” analogs—think tokenized labor or DeFi yield exemptions.
The fight kicked off in 2022 when the Secretary of Labor sued WiCare, a Pennsylvania outfit hiring in-home caregivers, for stiffing 181 workers on $468,414 in overtime and 88 on $61,355 in minimum wages from 2019 to 2021. WiCare countered that its “companionship services” staff qualified for a total FLSA exemption under 29 U.S.C. § 213(a)(15), but a DOL rule bars third-party employers like them from claiming it. Both sides sought summary judgment; WiCare ignored the DOL’s undisputed facts, so the district court greenlit $529,770 in back pay plus equal liquidated damages—totaling $1,059,540—and the Third Circuit affirmed on January 6, 2026.
In plain terms, Congress handed the DOL explicit power to define the companionship exemption’s edges, and their third-party rule—excluding agencies that aren’t the patient’s family—holds up, no matter WiCare’s gripes about “commerce” coverage or good-faith ignorance. WiCare loses big: full liability sticks, with courts rejecting their DOL fact sheet excuses that actually warned against the exemption. No changes for live-in care workers directly employed by families, but agencies now face zero wiggle room on federal wage floors.
Forget direct crypto ties—this labor smackdown echoes in the Loper Bright era, where the Supreme Court gutted broad agency deference yet blessed explicit statutory delegations like the FLSA’s. For crypto, expect SEC rules on broker exemptions or CFTC commodity carve-outs to survive if Congress greenlit them, tightening nooses on exchanges claiming “decentralized” status to skip registration. DeFi protocols mimicking third-party employment—yield farms as “companionship” for staked assets—risk reclassification as wage-like obligations, spiking compliance costs and trader jitters over stablecoin payroll tokens or NFT labor markets. Authority tilts toward regulators on clear mandates, widening decentralization-regulation chasms and pressuring sentiment with higher enforcement odds.
**Crypto operators: Vet exemptions now or pay DOL-style double damages later.**
