United States: U.S. District Court Blocks U.S. DOL's New Definition of Companionship Services Under FLSA

Executive Summary:  The U.S. District Court for the District of Columbia has issued a Temporary Restraining Order ("TRO") blocking the U.S. Department of Labor ("DOL") from enforcing the new definition of Companionship Services in its Final Rule on the Application of the Fair Labor Standards Act to Domestic Service Order ("Final Rule"), which was set to take effect, January 1, 2015. On December 22, 2014, this same court had vacated the Final Rule's differing treatment of home care agencies versus direct-hire employers, such as individuals, families, and households, stating that both should benefit similarly from the "companionship services" and "live-in" exemptions under the Fair Labor Standards Act ("FLSA"). To determine whether a Preliminary Injunction should issue, the court will hold a hearing on January 9, 2015.

The DOL's Final Rule:  Reversing a decades long interpretation, The DOL's Final Rule stated: "[t]he new regulatory text precludes third party employers (e.g., home care agencies)from claiming the exemption[s] for companionship services or live-in domestic service employees." The DOL claimed that those "employed by home care staffing agencies are not the workers that Congress envisioned when it enacted the companionship exemption, (i.e., neighbors performing elder sitting) but are instead professional direct care workers" and the DOL "is no longer convinced that its prior reading (of the exemption) was the best one."

The Companionship Exemption:  The Final Rule narrowed the companionship exemption significantly, even for direct-hire employers, largely limiting it to "fellowship and protection," and excluding home care workers who (i) spent more than 20 percent of their work hours performing "care" services, namely, assistance with "activities of daily living (such as dressing, grooming, feeding, bathing, toileting, and transferring) and instrumental activities of daily living, which are tasks that enable a person 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)." Excluded entirely were any "medically related services," such as "catheter care, turning and repositioning, ostomy care, tube feeding, treating bruising or bedsores, and physical therapy." General household services, such as vacuuming, dusting, or cleaning up after individuals other than the elderly or ill family member (which are capped at 20 percent under the current companionship exemption) could not be provided at all. The primary duties of an exempt companion were limited to "fellowship," meaning "to engage the person in social, physical, and mental activities, such as conversation, reading, games, crafts, or accompanying the person on walks, on errands, to appointments, or to social events," and "protection," meaning "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." Examples of "fellowship and protection" were activities such as "watching television together; visiting with friends and neighbors; taking walks; playing cards, or engaging in hobbies."

The Live-In Exemption:  The Final Rule also added conditions to the live-in domestic service employees' exemption, which was separate from the companionship exemption, and only applied to workers who actually resided in an elderly or ill person's home permanently or for extended periods of time. Although the DOL had always allowed a direct-hire employer and worker to enter into a voluntary agreement excluding from hours worked the worker's sleep time, meal time, and other duty-free time, under the Final Rule, written agreements were "strongly suggested" and direct-hire employers were required to maintain records showing the exact number of hours worked and to pay workers no less than the federal minimum wage for each of these hours. In addition, if a home care agency and a direct-hire employer were together found to be a live-in worker's joint employer, the agency would be liable for any overtime hours over 40 per week at one-half the worker's regular rate of pay, even though the direct-hire employer would not be held liable.

What To Do Now. The National Association for Home Care and Hospice, which brought the TRO motion, has advised: "During the time in which the TRO is in effect, home care companies can continue to pay home care aides and personal care attendants without added overtime compensation except where state law requires it. Home care companies are advised to consult competent counsel to determine if they qualify to use the exemption." At a minimum, home care agencies should comply with their State's laws and continue to prepare to comply with the DOL's Final Order, which includes taking the following steps:

1. Develop better policies and procedures to manage work hours by determining how low, medium, and high hour cases will be assigned; how contingencies that result in extra hours being worked will be handled; how casual workers or regular replacement workers will be assigned to pick up hours due to call-outs, worker absences, and emergencies; and how workers will be prevented from performing work that is neither authorized nor requested. Obtain worker sign-offs on all policies and procedures.

2. Investigate (a) time-tracking software to require workers to electronically record their hours worked, including non-service hours (e.g., intra-day travel time, in-service training, annual medical exam, and office meeting time), duty-free hours and sleep hours for 24-hour workers and any interruption of either duty-free or sleep hours; (b) scheduling software to avoid incurring unnecessary overtime, to assign replacement workers when needed, and to manage the number of workers on assignment at any given time and hours worked; and (c) monitoring software to track worker hours and overtime on a weekly basis, including average hours worked and active workers as a percent of available workers and comparative information from quarter to quarter and during periods of emergency.

3. Post signs at orientation and at in-service training sessions that state "no work outside regularly scheduled work hours is allowed" and "agency written authorization must be obtained for any emergency work-time." Warn workers that hours worked must be recorded accurately and that falsifying a time record is grounds for disciplinary action. Maintain accurate wage and hour records for at least seven years. If using an outside payroll company, ensure the contract states that the payroll records are the agency's property, the records will be maintained at a predetermined location in a readily accessible computer format for a minimum of seven years, the agency has the right at any time to inspect, audit, or request production of its records, and the records will be transferred to a new company immediately upon the agency's request.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.