Legal Insights

Labor Department's Final Rule Dramatically Expands FLSA Coverage for Home Care Workers

September 26, 2013
By: Andrea M. Kirshenbaum

On September 17, 2013, the United States Department of Labor (DOL) issued its final rule amending its domestic services regulations. As anticipated, it dramatically expands the Fair Labor Standards Act's (FLSA) minimum wage and overtime protections for home care workers.

Citing to the "dramatic expansion and transformation" in the home care industry since the original domestic service regulations were promulgated in 1975 and the "professionalization of home care work," the DOL's final rule substantially narrows the definition of "companionship services," to "limited, non-professional services." This is a significant amendment to the regulatory definition of companionship services, which had previously been broadly interpreted to exclude many home care workers from coverage under the FLSA's federal minimum wage and overtime requirements.

The DOL's press release announcing the final rule estimates that this regulatory change will result in approximately 2 million additional home care workers becoming covered under the FLSA. As a result, significantly more employers of home care workers must comply with the FLSA's minimum wage and overtime requirements.

Of note, the DOL's newly-minted definition of "companionship services":

• Includes 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." Examples of fellowship activities listed in the regulations are playing games, taking walks and accompanying persons being cared for to appointments. Examples of protection listed in the regulations are being present with the person in the home and accompanying the person outside of the home to monitor safety.

• Does not include the performance of "medically related services" or "domestic services performed primarily for the benefit of other members of the household." Determination of whether services are "medically related" is made on the basis of whether the services "typically require and are performed by trained personnel." Note that this is a functional analysis and is irrespective of the training or title of the person providing the services.

• Establishes that companionship services, including the provision of care, or assistance in the activities of daily living, cannot exceed 20 percent of the total hours worked per week. Examples of these types of activities include bathing, feeding, light housework, and meal preparation.

The DOL specifically notes that "most direct care workers acting as home health aides" including certified nurse assistants and "many whose title is personal care assistant" will not qualify for the FLSA's companionship exemption.

Of particular significance to institutional employers, the DOL's final rule precludes third-party employers, such as home health agencies, from claiming the companionship services or live-in domestic service employee exemption, as opposed to the individuals directly receiving the care. This is the case even in situations where the individual or member of the family or household using the services jointly employs the home care worker.

While the DOL's final rule also incorporates minor changes to the definition of "domestic service employment," the rule adds record-keeping obligations for employers of live-in domestic service employees. Specifically, the final rule requires employers of domestic service employees to maintain records of hours worked (previously maintaining a copy of the agreement of standard hours was sufficient).

With the DOL's final rule effective on January 1, 2015, employers that rely on the companionship exemption for home care worker employees should take action today by assessing the impact of these regulations and putting a transition plan in place.

More information is available on the U.S. Department of Labor's website at http://www.dol.gov/whd/homecare/

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