In September 2013, the Department of Labor (“DOL”) issued a final rule that narrowed the Fair Labor Standard’s Act’s (“FLSA”) companionship exemption for domestic care workers. The new rules were set to go in to effect on January 1, 2015, but the DOL has decided to delay enforcement and penalties for at least six months.

The FLSA currently provides that domestic care workers providing “companionship services” to elderly persons and sick or disabled individuals are exempt from the minimum wage and overtime requirements of the law. When the DOL’s new rules go into effect on January 1, 2015, however, the exemption for companionship services may only be claimed for home health aides employed directly by the individual, family, or household using the service. This means that third-party employers—such as home health care agencies that employ care workers and send them to assist clients of the agency—cannot claim the FLSA exemption and are subject to the overtime and minimum wage requirements.

This change is expected to result in nearly two million domestic care workers being entitled to overtime. It is also anticipated that this change will lead to significant increases in the cost of home care services.

On October 7, 2014, the DOL announced that it would delay enforcement of the new FLSA regulations (as well as penalties for their violation) for six months until June 30, 2015. In addition, the DOL said that for the second half of 2015 it would exercise its “discretion” in determining whether to bring enforcement actions against home health care agencies based on the extent to which employers have made “good faith efforts to bring their home care programs into FLSA compliance.”

Although the DOL will not strictly enforce the new rules for at least the first half of 2015, home healthcare employers are still required to begin complying with the FLSA regulations as of January 1, 2015.