The Department of Labor’s (DOL) final rule concerning domestic service workers under the Fair Labor Standards Act (FLSA) goes into effect on January 1, 2015. The “Home Care Final Rule” amended the domestic service employment regulations under the FLSA by 1) modifying the definition of “companionship services” and 2) prohibiting third party employers from claiming the companionship services exemption from the FLSA’s minimum wage and overtime compensation requirements, or the live-in domestic service employee exemption from FLSA’s overtime compensation requirement.
In 1975, the DOL implemented the first regulations relative to companionship services and live-in domestic service employee exemptions from overtime requirements (the 1975 Regulations). Under the 1975 Regulations, “companionship services” was defined as “fellowship care, and protection” which included “household work . . . such as meal preparation, bed making, washing of clothes and similar services” and could include general household work not exceeding “20 percent of the total weekly hours worked.” Congress’ intent, as noted by the DOL, was that the FLSA exemption was to apply to “elder sitters” whose primary responsibility was to watch over an elderly person or person with an illness, injury, or disability in the same manner that a babysitter watches over children. “Direct care workers” who provide services under titles such as certified nursing assistants, home health aides, personal care aides, and caregivers are providing increasingly skilled services and are “not the elder sitters Congress envisioned when it enacted the companionship services exemption. . .” Thus, according to the DOL, the Home Care Final Rule was necessary to exclude from the exemption those direct care workers who are not “elder sitting” but are providing professionalized care as a vocation.
Under the Home Care Final Rule, direct care workers who primarily provide “fellowship and protection” are providing “companionship services” while workers who are employed by third party employers, such as private home care agencies, are professional workers subject to the FLSA’s minimum wage and overtime protections.
- “Fellowship” means to engage the person in social, physical, and mental activities.
- “Protection” means to be present with the person in their home or to accompany the person when outside of the home to monitor the person’s safety and well-being.
- “Examples of fellowship and protection may include: conversation; reading; games; crafts; accompanying the person on walks; and going on errands, to appointments, or to social events with the person.”
- “Companionship services” includes the provision of 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.”
- “Companionship services” does not include the performance of “medically related services” which are typically performed by trained personnel, “such as registered nurses, licensed practical nurses, or certified nursing assistants, regardless of the actual training or occupational title of the individual providing the services.”
- Finally, the regulations state that “[t]hird party employers of employees engaged in companionship services . . . may not avail themselves of the minimum wage and overtime exemption” and “[t]hird party employers of employees engaged in live-in domestic service employment . . . may not avail themselves of the overtime exemption.”
Although the DOL received several requests from various other stakeholders to delay the effective date of the Final Rule, it has refused to do so. Instead, it has agreed to delay enforcement until July 1, 2015. This period of non-enforcement is not likely to give employers much reprieve. Indeed, reclassifying your workforce to comply with these regulations in 15 months is no easy feat, even if it means that you have a temporary stay from enforcement.
If you have questions about the Home Care Final Rule and what it means to your organization, contact a member of Verrill Dana’s Labor and Employment group for guidance. In the meantime, stay tuned for updates as the new law goes into effect. One court has already vacated the third party employment regulation on the grounds that the DOL exceeded its rulemaking authority when it implemented the Home Care Final Rule and granted a temporary restraining order against enforcement. A hearing for a Preliminary Injunction is scheduled for January 9, 2015 with a decision expected by January 14, 2015.