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09-23-2013 Department of Labor Announces Final Rule Extending Minimum Wage and Overtime Pay to Home Care Workers

The U.S. Department of Labor (DOL) will publish a final rule on October 1, 2013 extending the minimum wage and overtime pay provisions of the Fair Labor Standards Act (FLSA) to home care workers. This final rule, which will become effective January 1, 2015, alters the definition of "companionship services" in order to include direct care workers. Under the proposed rule, employees such as home health aides, personal care aides, and certified nursing assistants, must receive at least the minimum wage and overtime pay.

Department of Labor Announces Final Rule Extending Minimum Wage The FLSA was amended in 1974 to provide wage and hour protections to many domestic service workers. However, these protections were limited by the so-called "companionship" exemption, found at 29 U.S.C. §213(a)(15). This regulation, provided that employees performing companionship services for individuals who, because of age or infirmity, are unable to care for themselves were not covered by the FLSA's minimum wage and overtime pay provisions. At the time, Congress intended this exemption to exclude casual baby-sitters or elder-sitters from these provisions of the FLSA. However, as noted by the DOL, the home care industry has greatly changed and evolved over the years. Many such caregivers require medical and professional training and are hired, not by the family but by companies.

The final rule will change the regulation to reflect these changes in the home care workers industry. Persons employed directly by the person needing care or that person's family performing companionship services may continue to be excluded from FLSA coverage so long as such services are limited to fellowship or protection services. "Fellowship" services are defined to include social, physical, and mental activities, and "protection" services encompass monitoring a person's safety and well-being inside or outside the home environment. Further, in order to continue to be exempt from minimum wage and overtime pay, the provision of care, meaning assistance with activities of daily living, provided by an employee must be in conjunction with fellowship or protection services and must not exceed twenty percent (20%) of the total hours worked by the individual in a work week. Companionship services will no longer include medically related services performed by trained personnel. Minimum wage and overtime pay will also be extended to workers employed directly by the individual receiving care or the individual's family if the workers' domestic duties are performed primarily for the benefit of household members other than the elderly or ill individual.

Under the final rule, third party employers providing home care services are also treated differently. These employers will not be allowed to claim "companionship" or the "live-in domestic services" exemption regardless of their job duties. Thus, a vast majority of home care workers will no longer fall under the companionship exemption and will need to receive the minimum wage and overtime after forty hours. In order to comply with these new requirements, records of the hours worked by domestic service employees will also need to be maintained.

Fraser Stryker is a leader in labor and employment law. Attorneys in the Firm's Labor and Employment Law Practice Group advise employers on current legal issues as well as provide proactive solutions to avoid legal issues which may arise in the future. For more information on the extension of minimum wage and overtime protections to home care workers, please contact an attorney in the Labor and Employment Law Practice Group.

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