Just over three weeks after vacating a regulation barring third party employers from claiming the companionship exemption for minimum wage and overtime, in a January 14, 2015 decision in Home Care Association of America v. Weil, U.S. District Court Judge Richard Leon has also vacated the Department of Labor’s attempt to drastically narrow the definition of “companionship services” (29 CFR Sec. 552.6,). Judge Leon had previously stayed the changes in the new definition, originally scheduled to go into effect on January 1, 2015.
The new definition of “companionship services” would have drastically limited the provision of “care” – assistance with “activities of daily living” and “instrumental activities of daily living” – to less than 20% of an employee’s total weekly hours worked. For the past forty years, there had been no limitation on the amount of such care, although there was a 20% limitation on the performance of general household work. As a result, the vast majority of employees currently providing companionship services would no longer have qualified for the exemption.
In vacating the definition, Judge Leon found the DOL’s narrowed definition of “care” contrary to the statute and both arbitrary and illogical. Noting that the statutory exemption by its terms applies to services for individuals who “are unable to care for themselves,” he held that the new regulations’ drastic limitation in the quantity of the very “care” the elderly and disabled need directly contradicted the statute: “Indeed, what services could possibly be required more by those ‘unable to care for themselves’ than care itself?” That the DOL was attempting to limit the very thing essential to the daily survival of the elderly and disabled was nonsensical.
Judge Leon also sharply criticized the DOL’s blatant disregard of Congressional intent geared towards preserving the companionship exemption for the benefit of the “millions of American families [struggling each day to financially] care for their loved ones.” Bearing in mind the ever-increasing number of families that will share in the struggle of caring for the elderly and disabled, Judge Leon reiterated that the DOL cannot circumvent the electorate. As Judge Leon noted, even when the FLSA was otherwise amended, or when attempts were made to remove the exemption from third party employers, there was no attempt to change the definition of companionship services. If Congress has not redefined the 40-year-old exemption, then the DOL should not be able to do it now, he reasoned.
The DOL has not yet indicated whether it will appeal, but an appeal is highly likely.
As we have previously noted, even though the long-standing FLSA minimum wage and overtime companionship services exemption definitions now will remain in effect for at least the near future , employers must still remember to comply with applicable state and local laws that may require minimum or higher wages and/or overtime for companionship services.