By Susan Prince, JD
Legal Editor
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Get Your Report Now!The federal Department of Labor’s (DOL) Home Care Final Rule (Final Rule) has been upheld by the D.C. Court of Appeals. Most significantly, the DOL prohibits third party employers, such as home care agencies, from claiming the companionship or live-in worker exemptions.
The DOL has also revised the definition of “companionship services” to clarify and narrow the duties that fall within the term. As a result, many more domestic service workers will be protected by the Fair Labor Standards Act’s (FLSA) minimum wage and overtime provisions.
What is changing?
According to the DOL, the Final Rule makes these significant changes to the current rules:
- The tasks that comprise exempt companionship services are more narrowly defined.
- The exemptions for companionship services and live-in domestic service employees can be claimed only by the individual, family, or household using the services, rather than third-party employers such as home healthcare agencies.
- The Final Rule revises the recordkeeping requirements for employers of live-in domestic service employees.
What is not changing?
The DOL states that the Final Rule makes no changes to regulations concerning:
- What constitutes a private home (the type of residence in which domestic service occurs)
- Whether an employment relationship exists
- Whether an employee is jointly employed by two or more employers
- What constitutes compensable hours worked
Companionship services
The term “companionship services” means 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.
Under the Final Rule, “companionship services” also includes the 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 each workweek.
- “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.
By changing the definition of “companionship services,” the DOL has decreased the number of companions who would qualify for the minimum wage and overtime exemptions under the FLSA.
Live-in domestic service employees
Live-in domestic service workers who reside in the employer’s home permanently or for an extended period of time and are employed by an individual, family, or household are exempt from overtime pay, although they must be paid at least the federal minimum wage for all hours worked.
Live-in domestic service workers who are solely or jointly employed by a third party must be paid at least the federal minimum wage and overtime pay for all hours worked by that third party employer.
Under the Final Rule, these employers must maintain an accurate record of hours worked by live-in domestic service workers. The employer may require the live-in domestic service employee to record his or her hours worked and to submit the record to the employer.
Effective date?
The rule was originally to take effect on January 1, 2015, but was delayed by court action. The DOL had stated at the time, that from January 1, 2015 to June 30, 2015, it would not bring enforcement actions against any employer for violations of FLSA obligations resulting from the amended regulations.
From July 1, 2015 to December 31, 2015, the DOL claimed that it would exercise prosecutorial discretion in determining whether to bring enforcement actions, with particular consideration given to the extent to which states and other entities have made good-faith efforts to bring their homecare programs into compliance with FLSA’s amended rules.
We have yet to see when the regulations are effective or whether such a grace period will be allowed when the regulatory changes become effective. The D.C. Court of Appeals has remanded the decision back to District Court for summary judgment in favor of the DOL. The timing of the decision on remand will influence the effective date of the DOL’s regulations.
Join us on September 10, 2015 for the 30-minute live event, "New Overtime Rules for Home Care Agencies: Responding to DOL’s Elimination of Companionship Exemption." Register today!
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 Susan E. Prince, J.D., is a Legal Editor for BLR’s human resources and employment law publications. Ms. Prince has over 10 years of experience as an attorney and writer in the field of human resources and has published numerous articles on a variety of human resources and employment topics, including compensation, benefits, workers’ compensation, discrimination, work/life issues, termination, and military leave. Ms. Prince also served as an expert on several audio conferences discussing the 2004 changes to the federal regulations under the Fair Labor Standards Act. Before starting her career in publishing, Ms. Prince practiced law for several years in the insurance industry and served as president of a retail sales business. Ms. Prince received her law degree from Vermont Law School.
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Questions? Comments? Contact Susan at sprince@blr.com for more information on this topic
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