Hunton Employment & Labor Perspectives

On December 15, 2011, the Department of Labor issued proposed rule changes that would extend the Fair Labor Standards Act’s minimum wage and overtime protections to the roughly two million in-home caregivers providing services to the elderly and infirm.  If enacted, the changes would eliminate the FLSA’s longstanding companionship and live-in domestic service exemptions, and likely lead to a major change in the in-home care worker industry.

At present, the FLSA contains numerous regulations defining what companions and live-in domestic workers can and cannot do while remaining exempt from the Act’s overtime and minimum wage obligations.  The DOL proposes to revise the regulations in four primary respects:

• Limit the tasks that may be performed by an exempt companion to those of “fellowship and protection.”
  • Examples of such tasks would be watching television, taking walks or engaging in hobbies.
• Clarify the type and amount of “incidental” activities that an exempt companion may provide.
  • Such activities would include making lunch, doing minor household work, and assisting with some “intimate personal care” services such as hair combing and teeth brushing, but may not exceed 20% of the total hours worked.
  • Such activities could no longer include work benefiting other members of the household, such as performing housekeeping or laundry services for the household.
• Limit the exemption to companions or live-in domestic workers who are employed only by the family or household using the services. 
  • Third party employers – like health care staffing agencies – could not take advantage of the exemption, even if the employee is jointly employed by the third party employer and the household/family.
• Change the recordkeeping requirement for live-in domestic workers. 
  • Employers would no longer be able to avoid keeping formal pay records for these workers simply by having an agreement regarding work hours, but instead will be required to keep and maintain accurate records of actual hours worked.

These proposed rule changes reflect the DOL’s belief that in-home care industry has fundamentally changed since the FLSA’s regulations governing “domestic services” were implemented in 1974, and its expectation that in-home care services will grow by 50% in the next decade.  The DOL has emphasized its hope that the new rules would provide a positive social impact for women and minorities, who comprise the majority of in-home care workers.

Notably, the proposed changes would overturn the United States Supreme Court’s 2007 decision in Long Island Care at Home, Ltd. v. Coke and require third party employers, like staffing agencies, to pay companions and home health workers overtime under the FLSA when they work more than forty hours in a week.

We recommend interested employers review the proposed rule and consider participating in the mandatory 60-day notice and comment period that will end on February 27, 2012 by submitting a comment through the federal eRulemaking portal identified by RIN 1235-AA05.