Federal Department of Labor regulations that would have made employees of third-party home care agencies ineligible for the Fair Labor Standards Act’s (FLSA) companionship exemption from minimum wage and overtime pay and live-in domestic service exemption from overtime pay effective January 1, 2015 have been struck down by the US District Court for the District of Columbia.

The court held on December 22  that the regulations contravene the FLSA’s language regarding these exemptions.  Home Care Association of America v. Weil, Case No. 14-cv-0967(RJL) (Dec. 22, 2014). 

The court’s decision leaves unchanged the portion of the regulations imposing a more narrow definition upon the type of work that will be considered “companionship care.”

When Congress extended coverage of the FLSA to domestic services employees in 1974, it provided an exemption from federal minimum wage and overtime requirements for all employees providing domestic companionship services to the elderly and individuals with disabilities and an exemption from federal overtime requirements for employees providing live-in domestic services, regardless of whether the employee was employed directly by the consumer or the consumer’s family, or by a third-party provider.  See 29 U.S.C. §§ 213(a)(15) and 213(b)(21);  Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007).[1]   Following the Coke decision, several bills that would have removed employees of third-party providers  from these exemptions were introduced in Congress.  None were successful.  

In October 2013, the DOL published regulations that purport to eliminate the exemption for employees of third party employers and to narrow the definition of services that can be considered “companionship services.” Application of the Fair Labor Standards Act to Domestic Service, 78 FR 60454 (October 1, 2013), codified at 29 CFR. Part 552 (“Home Care Worker Regulations”). The Home Care Worker Regulations were scheduled to become effective January 1, 2015.  The lengthy period of delay reflected the magnitude of the change on the operations of private employers and governmental agencies providing home care services to the elderly and persons with disabilities.

The Home Care Worker Regulations were strongly opposed by many private home care employers and by some affected state and local entities.  Some requested the DOL to further delay implementation of the regulations.  On October 9, 2014, the DOL delayed administrative enforcement of the regulations until June 30, 2015, but it did not delay private enforcement (in effect exposing private third-party providers to liability effective January 1). 

The Home Care Association brought suit in federal court, and filed a motion challenging the Home Care Worker Regulations as being arbitrary, capricious and inconsistent with Congress’s language and intent.  Judge Leon agreed, finding that the language of the exemptions was “quite clear”:  they apply to “any employee” who is employed to provide companionship services or who resides in the household in which he or she is employed to perform domestic services; and do not leave room for the DOL to “parse groups of employees based upon the nature of their employer.”  Accordingly, Judge Leon vacated 29 CFR § 552.109, the portion of the regulations purporting to remove employees of third-party employers from these exemptions.

It is expected that the DOL will appeal this decision, and the agency may seek to stay its effect.  It seems unlikely that a stay would be granted, given the firmness of the court’s conclusion that the DOL had no power to act and the fact that the agency has already delayed administrative enforcement. 

The remaining portions of the Home Care Worker Regulations, which significantly change the definition of companionship services, are not affected by the court’s decision.  The regulations now provide that companionship services:  

  • Include provision of “fellowship,” defined as engaging the client in social, physical and mental activities and accompanying the client on errands, appointments and to social events
  • Include the provision of “protection,” defined as being present in the home or accompanying the client to monitor safety and well-being
  • May include the provision of “care” (assistance with activities of daily living and with tasks that enable the client to live independently at home, such as meal preparation, driving, light housework, managing finances, assistance with taking or medications and arranging medical care), if provided in conjunction with fellowship and protection and so long as “care” does not exceed 20 percent of the weekly hours worked with the client 
  • Do not include domestic services performed primarily for benefit of other members of the household and
  • Do not include performance of medically related services typically performed by trained personnel, such as registered nurses, licensed practical nurses, certified nursing assistants.