People who care for the sick or elderly in their homes are eligible for unemployment benefits when the job ends — even if that patient was a family member, a Minnesota court ruled Monday.

The Minnesota Court of Appeals decision is the latest development in a rapidly evolving and fast-growing home health industry funded by a federal-state Medicaid program. It also marks the latest legal rebuke against efforts to rein in costs of providing personal care assistants, which now total hundreds of millions of dollars a year.

The decision to deem James Weir ineligible for unemployment following the death of his mother violated the equal protection clause of the Constitution, the Appeals Court wrote in the 3-0 ruling. It reverses a state Department of Employment and Economic Development (DEED) ban on paying unemployment to care assistants defined as immediate family members in an effort to prevent fraud. In a similar decision in December, the Appeals Court used the same reasoning to reverse a statute that cut the pay of relative assistants by 20 percent under the assumption that family members would continue to provide the care anyway.

The rationale behind both cases is nearly identical and points to the flaws in the laws, passed in consecutive years as cost-saving measures that singled out relative caregivers, said David Bradley Olsen, the attorney who sued the Department of Human Services on behalf of eight home-care agencies and nine relative caregivers in Healthstar Home Health Inc. vs. Jesson, the case that resulted in the reinstatement in wages.

“In both cases you had a group of similarly situated people who are subject to the same statutory and regulatory scheme, all providing the same services, and yet they’re treated differently,” Olsen said. “And in both cases they were treated differently regarding assumptions.”

Blake Chaffee, director of communications analysis and research for DEED, said officials were still reviewing the decision and hadn’t decided whether to ask the state’s high court to hear the case. As of now, he said, the department “will work to be in compliance with the decision.”

Weir, 50, of Richfield began caring for his mother in March 2010 under the state’s multimillion medical assistance program that allows some family members to work for relatives. After his mother died in December 2011, he applied for unemployment benefits through ACCRA Care Inc., the agency that paid him to care for his mother. The state denied Weir the benefits because his employment was considered “noncovered,” citing a July 2010 amendment that excluded immediate family members from unemployment benefits. Weir challenged the statute, an unemployment law judge upheld the decision and Weir appealed.

According to the Appeals Court decision, the law barring unemployment for family caregivers was spawned by concerns that fraud was more rampant among people who care for relatives. For instance, state attorneys contended that relatives could claim they had worked the maximum allowable hours early in six-month time period, then collect unemployment for the remainder, guaranteeing both a paycheck and unemployment benefits. The state asserted that “while such manipulation would also theoretically be possible in nonfamily settings, it is substantially less likely.”

In the opinion, Judge Jill Flaskamp Halbrooks said there was no evidence to back that claim, noting that multiple fraud protections are already in place and that an effort to prevent fraud does not justify cutting unemployment benefits only to people who cared for relatives.

“Even if the distinction between these classes were genuine, there is no evident connection between the claimed fraud and the prescribed remedy of denying unemployment benefits to all immedate-family-member PCAs,” Halbrooks wrote.

Olsen said it’s rare for a court to strike down a statute as being unconstitutional, and the fact that it’s happened twice in three months in home health care industry could draw scrutiny.

“It would appear to me that there are probably a lot of people out there that would benefit from this opinion,” he said. “Twice they’ve been discriminated against, and twice they won.”