DOL Extends Minimum Wage and Overtime Protections to Home Care Workers
Last week, the Department of Labor’s (“DOL”) Wage and Hour Division released a new rule extending minimum wage and overtime protections under the Fair Labor Standards Act (“FLSA”) to home care workers employed by third-party employers. The new rule, which is not scheduled to take effect until January 1, 2015, will prevent third-party employers, such as home health care staffing agencies, from continuing to claim the long-debated “companionship exemption“ to the FLSA’s minimum wage and overtime requirements for home care employees who provide companionship services. Notably, the companionship exemption may still be claimed by individual consumers and their families who hire home care workers directly, without the use of a third-party agency.
What Is the “Companionship Exemption”?
Under the current interpretation of the companionship exemption, home care employees who provide “companionship services” as defined by the FLSA need not be paid the minimum wage or overtime. The term “companionship services” traditionally has been defined by the DOL as “services for the care, fellowship and protection of persons who, because of advanced age or physical or mental infirmity, cannot care for themselves.” Such services include household work for aged or infirm persons, including meal preparation, bed making, clothes washing and other similar personal services. General household work is also included, as long as it does not exceed 20 percent of the total weekly hours worked by the companion. Where this 20 percent limitation is exceeded, the employee must be paid for all hours in compliance with the minimum wage and overtime requirements of the FLSA.
How Will the DOL’s New Rule Impact Home Health Care Employers?
Once the DOL’s new rule goes into effect on January 1, 2015, it will impact home health care employers in two ways. First, home care agencies who act as third-party providers of home care employees will no longer be able to claim the companionship exemption for employees providing companionship services. Rather, these employees will be entitled to the minimum wage and overtime requirements of the FLSA.
Practically speaking, most home health care staffing agencies already pay their employees minimum wage. One also can safely assume that few home care workers who currently qualify for the exemption work over 40 hours per week. Nonetheless, in the event a home care worker does work over 40 hours, or earn less than minimum wage as of January 1, 2015, his/her third-party employer will find itself in violation of the DOL’s new rule.
Second, the definition of “companionship services” has been revised to mean “the provision of fellowship and protection for an elderly person or person with an illness, injury or disability who requires assistance in caring for himself or herself.” These services will include provision of care “if the care is provided attendant to and in conjunction with the provision of fellowship and protection and if it does not exceed 20 percent of the total hours worked per person and per workweek.” [emphasis added]
According to the DOL, this new definition is narrower than the current definition and will be interpreted more stringently. Therefore, once the new rule goes into effect, one can reasonably anticipate a net reduction in the number of home care employees to whom the exemption may be claimed by third-party employers.
Rest assured, direct care workers who provide medically-related services, for which training is typically a prerequisite (e.g., registered nurses), are not impacted by this rule change because they are not considered companionship workers and, therefore, do not qualify for the companionship exemption. They may, however, be entitled to other exemptions, none of which are affected by this rule change.
The DOL’s Fact Sheet regarding the new rule can be accessed here.
The entire 354-page preamble and text of the final Companionship rule, which provides an exhaustive and detailed rational for the rule can be found here. (The actual text of the rule is only four pages and is at the end of the document.)
If you have any questions or would like additional information about the DOL’s new rule, please contact Steve Lyman at slyman@wp.hallrender.com or your regular Hall Render attorney.
