Minimum Wage and Overtime Extended to In-Home Aides
Tuesday, September 24, 2013
by: Elizabeth Hogue, Esq.

Section: Quality and Educational Programming

The U.S. Department of Labor (DOL) has issued final rules effective on January 1, 2015 that eliminates the Companionship and Live-In Exemptions for agencies.
The final rule includes several significant changes such as:

  • The tasks that comprise "companionship services" are more clearly defined;
  • The exemptions for companionship services and live-in domestic service employees are limited to the individual, family, or household using the services; and
  • The recordkeeping requirements for employers of live-in domestic services employees are revised.

Major changes in the final rule include:
Minimum Wage and Overtime Protections.  The final rule revises the definition of "companionship services" to clarify and more narrowly define the duties that fall within the term.  The final rule also prohibits third party employers, such as home care agencies, from claiming the companionship or live-in exemptions. 
Companionship Services.  The term "companionship services" means the provision of fellowship and protection for an elderly person or a person with an illness, injury or disability who requires assistance in caring for him or herself.  Companionship services also include the provision of "care" if the care is provided attendant to and in conjunction with the provision of fellowship and protection, and does not exceed 20% of the total hours worked per person and per workweek. 
Fellowship and Protection.  According to the final rule, "fellowship" means to engage the person in social, physical, and mental activities.  "Protection" means to be present with persons in their homes or to accompany persons when outside of the home to monitor the persons' safety and well-being.  Examples of fellowship and protection may include: conversation, reading, games, crafts, accompanying persons on walks, and going on errands, to appointments or to social events.
Care.  The definition of companionship services in the final rule allows for the performance of "care" services if those services are performed attendant to and in conjunction with the provision of fellowship and protection and if they do not exceed 20% of the employee's total hours worked in a workweek per consumer.  The companionship services exemption is not applicable when employees spend more than 20% of their workweeks performing care.  In such workweeks, employees are entitled to minimum wage and overtime.
In the final rule, "care" is defined as assistance with activities of daily living; such as dressing, grooming, feeding, bathing, toileting and transferring; and instrumental activities of daily living, i.e. tasks that enable persons to live independently at home, such as meal preparation, driving, light housework, managing finances, assistance with the physical taking of medications, and arranging medical care.
Household Work.  The final rule limits household work to tasks that benefit the elderly person or a person with an illness, injury, or disability.  Household work that primarily benefits other members of the household, such as making dinner for other household members or doing laundry for everyone in the household, results in loss of the companionship exemption and thus employees would be entitled to minimum wage and overtime pay for the workweek.
Medically Related Services.  The definition of companionship services does not include the provision of medically related services that are typically performed by trained personnel.  Under the final rule, the determination of whether a task is medically related is based on whether the services are typically required and are performed by trained personnel; such as registered nurses, licensed practical nurses, or certified nursing assistants.  The determination is not based on actual training or occupational titles of the workers performing the services.  Performance of medically related tasks during the workweek results in loss of the exemption, and employees are entitled to minimum wage and overtime pay for that workweek.
Live-In Domestic Service Employees.  Live-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.  Employers of live-in domestic service workers may enter into agreements to exclude certain time from compensable hours worked; such as sleep time, meal time, and other periods of complete freedom from work duties.  If the sleep time, meal period, or other periods of free time are interrupted by a call to duty, the interruptions must be counted as hours worked.  Under the final rule, employers must maintain accurate records of hours worked by live-in domestic service workers.  Employers may require the live-in domestic service employees to record their hours worked and to submit records to employers.
Third Party Employers.  According to the final rule, third party employers of direct care workers, such as home care staffing agencies, are not permitted to claim either the exemption for companionship services or the exemption for live-in domestic service employees.  Third party employers may not claim either exemption even when employees are jointly employed by third party employers and individuals, families, or households using the services.  Individuals, families, and households may claim applicable exemptions.  Consequently, if there is a third party employer, the individual, family, or household will not be liable for unpaid wages under the FLSA, provided the requirements of an applicable exemption are met.
Paid Family or Household Members in Certain Medicaid-Funded and Certain Other Publicly Funded Programs Offering Home Care Services.  According to DOL, the Fair Labor Standards Act (FLSA)  does not necessarily require that once families or household members are paid to provide some home care services that all care provided by that family or household member is part of the employment relationship. If applicable, DOL will not consider a family or household with a pre-existing close personal relationship with the consumer to be employed beyond a written agreement developed with the involvement and approval of the program and the consumer or consumer's representative, usually called a plan of care, that reasonably defines and limits the hours for which paid home care services will be provided.
The final rule includes major changes.  Although January 1, 2015, seems like a long way off, agencies should begin preparations for these changes now.

Find more information at the U.S. Dept. of Labor website.

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