Posted on 01/12/2012 at 02:42 PM by The Newsroom
On December 27, 2011, the Department of Labor's Wage and Hour Division published a Notice of Proposed Rulemaking that would provide minimum wage and overtime protections to workers who provide in-home care services for the elderly and infirm. The DOL says the change will affect nearly two million workers. The Proposed Rule amends the live-in worker and companionship exemptions under the Fair Labor Standards Act. As proposed, the Rule will (1) more clearly define the tasks that may be performed by companions who can remain exempt, (2) limit the companionship exemption to companions employed only by the family or household using the services, and (3) restrict the use of the companionship exemption and/or the live-in domestic services overtime exemption by third party employers, such as in-home care staffing agencies. Perhaps the most devastating of proposed changes is eliminating the FLSA exemption for in-home care workers of third party employers, which will affect an entire industry. History The current regulations exempting companionship and live-in domestics were promulgated in 1975, after Congress amended the FLSA in 1974, and have remained largely unchanged. Although Congress has not amended this area of the FLSA for 38 years, the DOL now believes its regulations need to be changed. Attempting to explain its action, the DOL said the in-home care industry has undergone a dramatic transformation and that workers who perform in-home services today are performing duties and working in circumstances that were not envisioned in 1975. Hence, the DOL said its proposed changes are necessary because the current regulations may be too broad and not in harmony with Congressional intent. Companionship Services Currently, persons who provide companionship services to the aged or infirm are exempt from both the minimum wage and overtime pay requirements of the FLSA. The current regulation implementing the companionship exemption defines companionship services as fellowship, care, and protection to the aged or infirm, and includes exempt services of a household nature related to a persons care, such as meal preparation, bed making, laundry, and similar services. 29 C.F.R. § 552.6. The current regulation also allows incidental services (like general household work), as long as those services do not exceed 20% of the total companionship services hours worked per week. The current regulation specifically excludes from the statutory exemption for companionship services those services which require and are performed by trained personnel such as a registered or practical nurse. Although the proposed rules retain the broad definition of exempt companionship services, they include new specific lists which likely will have a limiting effect. For instance, while the current rule mentions three types of companionship services fellowship, care, and protection the proposed regulation initially only covers fellowship and protection. It defines those two terms to include such tasks as watching television together, taking walks, and engaging in hobbies. The care permitted by the current rule appears to be relegated to incidental services under the proposed rule. Specifically, the proposed rule would permit what it labels intimate personal care services only if those services are incidental to the provision of fellowship and protection. To be incidental the services may not exceed 20% of the total hours worked in the workweek. The proposed regulation has a litany of examples of incidental intimate personal care services, including occasional dressing (assistance with putting on and taking off outerwear and footwear), grooming, toileting, feeding, and driving (driving to appointments, errands, and social events). The proposed rule makes clear that medically-related duties are not within the scope of exempt companionship services. Medically-related duties are any kind of medical care, including medication management, the taking of vital signs, and assistance with physical therapy. However, under the proposed rule, reminding the aged or infirm person of a medical appointment or of a predetermined medicinal schedule (e.g., take your pills) would be considered exempt, as an incidental intimate personal care service. Live-In Domestic Workers Currently, live-in domestic workers who reside in the household in which they work are exempt from the overtime pay requirements of the FLSA, but they are not exempt from the minimum wage requirements. The current regulation implementing this section of the law defines exempt live-in domestic work as services of a household nature performed by a person living within that household, and lists the types of employees to which the exemption applies, such as cooks, waiters, butlers, valets, maids, [and] housekeepers. 29 C.F.R. § 552.3. The proposed regulations add to the list, to include companions, nannies, home health aides and personal care aides. Third Party Employers Currently, the exemptions for in-home care workers are fully applicable to those working for a third party employer who assigns the workers to a home. 29 C.F.R. § 552.109. The DOLs proposed rule will completely reverse that provision and make the exemption applicable only to the individual, family, or household employing the companion or live-in worker. Under the proposed rule, third party employers will be prohibited from claiming the companionship exemption or live-in domestic worker exemption even if the employee is jointly employed by both the third party and the family or household. Action and Implications Affected third party employers of in-home care workers are encouraged to comment on the proposed rule, and may do so until February 27, 2012, when the comment period closes. More information on the proposed rules and how to comment on them is available at the DOLs website at http://www.dol.gov/whd/flsa/companionNPRM.htm. If these new regulations are adopted as proposed, it is likely that the FLSAs overtime and minimum wage requirements will become applicable to a substantial number of workers who are currently exempt from the FLSA. Given the DOLs position on the proposal, and the substantial damages and civil penalties an employer can potentially face for violation of wage and hour laws, third party employers who employ home care workers are encouraged to review their current practices and begin to take steps to manage the risks presented by the proposed rule. This includes determining which in-home care workers, if any, can still be exempt, and which ones will require an increase in wage rate and the payment of overtime (and a clearly different timekeeping) if these regulations become final and effective. In the current political climate and with the upcoming election, we suspect these proposed rules will be made final and effective within the current year.
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Categories: Employment & Labor Law
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