DOL Announces Delayed Enforcement of Home Care Workers’ Minimum Wage and Overtime Final Rule

On October 9, 2014, the Department of Labor’s Wage and Hour Division (“DOL”) announced that it will not bring enforcement actions for six months, from January 1 to June 30, 2015, against employers for violations of the 2013 Final Rule as to minimum wage and overtime protections for Home Care Workers.  From July 1, 2015 to December 31, 2015, the DOL “will exercise prosecutorial discretion in determining whether to bring enforcement actions” and will give “particular consideration” to “the extent to which States and other entities have made good faith efforts to bring their home care programs into compliance with the FLSA since promulgation of the Final Rule” in deciding whether to prosecute.

Although the DOL will delay enforcement actions, it is important to note that the Final Rule still will take effect on January 1, 2015.  Thus, employees may still pursue a civil lawsuit against employers for non-compliance as of January 1, 2015.

Background

On October 1, 2013, the DOL issued a Final Rule (78 FR 60454) narrowing the companionship exemption under the Fair Labor Standards Act (“FLSA”) and extending the FLSA’s minimum wage and overtime protections to direct care workers employed by agencies and other third-party employers beginning January 1, 2015. Direct care workers are workers who provide home care services, including certified nursing assistants, home health aides, personal care aides, caregivers, and companions.

Prior to the Final Rule, domestic service workers employed to provide “companionship services” for the elderly or persons with an illness, injury, or disability were exempt from the FLSA’s minimum wage and overtime requirements. Similarly, live-in domestic service workers were exempt from the FLSA’s overtime requirements, but not minimum wage requirements. The Final Rule, among other things, makes significant changes to the “companionship services” exemption so that many direct care workers will now be covered by the FLSA’s minimum wage and overtime provisions.

The Final Rule

As previously detailed [link], the Final Rule implements the following changes:

  • “Companionship services” is more narrowly defined to include only the fellowship and protection of an elderly person or person with an illness, injury or disability. In addition, activities related to “care” (i.e. activities of daily living such as dressing, grooming, feeding, bathing, toileting and transferring) cannot exceed 20% of the time worked.
  • The exemption for companionship services and live-in domestic service employees can only be claimed by individuals, families, and households directly utilizing the services. Home care agencies and third party employers can no longer claim these exemptions and are required to pay federal minimum wage and overtime pay to any direct care worker regardless of the worker’s duties. Accordingly, a domestic service work employee who works more than forty (40) hours in any workweek must be paid overtime pay at one and one-half times the employee’s regular rate of pay.
  • Employers must maintain accurate time records for live-in domestic service employees to ensure they are compensated for all hours worked.

What Are Your Obligations Under the Federal Regulation?

 Although it appears that home care agencies and third party employers have been given a limited reprieve, it is of significant note that the DOL did not delay the effective date of the Final Rule.  Thus, home care agencies and third party employers should continue their efforts to comply with the Final Rule beginning January 1, 2015.

As with most wage and hour obligations, California employers must also comply with overlapping state law.  There are approximately 200,000 domestic workers in California that are covered by A.B. 241, which went into effect January 1, 2014.  A.B. 241 requires overtime compensation be paid to certain domestic workers, including housekeepers, nannies, and caregivers in private homes, who work more than nine (9) hours in any workday or more than forty-five (45) hours in any workweek.

If you have any questions regarding the federal regulation or A.B. 241, please contact one of the authors or other AALRR labor and employment attorneys.

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