Originally published in ADVANCE Perspectives: LTC
"We're guaranteeing homecare workers minimum wage and overtime pay protection. We are going to make sure that over a million men and women in one of the fastest-growing professions in the country don't slip through the cracks. We're going to make sure that companies who do right by their workers aren't undercut by companies who don't. We're going to do what's fair, and we're going to do what's right.." - President Barak Obama, December 15, 2011.
The Fair Labor Standards Act ("FLSA") exempts from the Act's minimum wage and overtime provisions domestic service employees who are employed to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves. The United States Department of Labor, which is charged with implementing and enforcing rules under the FLSA, has issued its proposed rule changes that would provide minimum wage and overtime protections for roughly two-million workers who provide in-home services for aged and infirm persons. The proposed rules are to be codified at 29 C.F.R. § 552 et seq.
OLD RULES
Under the old rules, workers who performed companionship services were exempt under the FLSA. "Companionship Services" was defined as fellowship, care, and protection for a person who, because of advanced age or mental or physical infirmity, cannot care for his or her own needs. The old rules did not clearly define the tasks that may be deemed exempt companionship services and allowed both third-party employers, as well as the individual or household employers using the services, to take advantage of the exempt status. The DOL has noticed that a growing demand for long-term in-home care has led to a substantial growth of the in-home care services industry. The DOL's analysis predicts that the industry will continue to grow 50% between now and 2018. The DOL states that the current rules are outdated because "workers who today provide in-home care to individuals are performing duties and working in circumstances that were not envisioned when the companionship services regulations were promulgated."
NEW RULES
The two important purposes of the new rules are to more clearly define the tasks that may be performed by an exempt companion and to limit the companionship exemption to those employees who are employed only by the family or household using the services. First, the new rules define "companionship services" as the provision of "fellowship" and "protection" for persons that, because of advanced age or physical or mental infirmity, are unable to care for themselves. "Fellowship" is now defined as engaging the person in social, physical, and mental activities, including conversation, reading, games, crafts, walks, errands, appointments, and social events. "Protection" is now defined as being present with the person in their home or to accompany the person when outside of the home to monitor the person's safety and well-being. The new rules also include a provision limiting the amount of "incidental" services that a companion may do for the aged or infirm person to 20% of the total hours worked in a week. The rules provide a non-exhaustive list of services that would be considered incidental services including: dressing, grooming, toileting, driving, feeding, laundering, and bathing. Incidental services do not include personal services benefitting others within the household other than the aged or infirm person and do not include medical care for the aged or infirm person. The rules state that medical care includes, but is not limited to, catheter and ostomy care, wound care, injections, blood and blood pressure testing, turning and repositioning, determining the need for medication, tube feeding, and physical therapy. Exempt companions may remind the aged or infirm person of appointments or a predetermined medicinal schedule.
Second, the new rules mandate that companions employed by third-party employers, such as staffing agencies and health care providers, will no longer be able to claim the exemption under the FLSA. This applies even where the employee is jointly employed by the third-party employer and the individual or family using the services. On the other hand, the individual or family employer may assert the exempt status if the employee meets all of the new requirements even when a joint employer relationship exists with a third-party employer.
WHAT TO DO AS AN EMPLOYER
The first major change more clearly defining "companion services" will likely affect both third-party employers and individual or family employers in the same manner. Both types of employers will need to assess the services and tasks performed by their employees to determine whether the employee is exempt under the new rules. Moreover, both employers will need to track the hours spent on incidental services to ensure that their employee is not spending more than 20% of the work week performing those incidental services. Individual or family employers do not need to worry about wages and hours worked if their employee is only performing "companion services" and performing less than 20% of incidental services.
The second major change, which restricts third-party employers from claiming the exempt status under the FMLA, places a significant burden on third-party employers. Now, third-party employers must track the total number of hours worked by companion service employees to ensure they are being paid the proper wages for the hours worked, including any overtime compensation. Merely maintaining a work agreement with these workers will not be sufficient under the new rules.
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