The U.S. Department of Labor (DOL) issued a rule under the Fair Labor Standards Act (FLSA) several years ago that made substantial changes to the minimum wage and overtime protections for the many domestic service workers who enable individuals with disabilities and the elderly to continue to live independently in their homes and participate in their communities.
The rule, which underwent a lengthy court challenge, contained several significant changes from the previous regulations, including:
- The tasks that comprise “companionship services” were more clearly defined.
- The exemptions for companionship services and live-in domestic service employees were limited to the individual, family, or household using the services.
- The recordkeeping requirements for employers of live-in domestic service employees were revised.
Minimum Wage and Overtime Protections
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 himself.
Under the final rule, companionship services also included the provision of “care” if the care is provided attendant to and in conjunction with the provision of fellowship and protection and if it doesn’t exceed 20 percent of the employee’s total hours worked per person per workweek.
Fellowship and protection. Under the final rule, “fellowship” means to engage the person in social, physical, and mental activities. “Protection” means to be present with the person in her home or to accompany the person outside the home to monitor her safety and well-being.
Examples of fellowship and protection may include engaging in conversation, reading, playing games, doing crafts, accompanying the person on walks, and going on errands, to appointments, or to social events with the person.
Care. The definition of companionship services 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 don’t exceed 20 percent of the employee’s total hours worked in a workweek per consumer.
In the final rule, “care” was defined as 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 preparing meals, driving, doing light housework, managing finances, assisting with the physical taking of medications, and arranging for medical care).
Household work. The final rule limited household work to tasks that benefit the elderly person or person with an illness, injury, or disability. Household work that primarily benefits other members of the household, such as making dinner for another household member or doing laundry for everyone in the household, results in loss of the companionship exemption. As a result, the employee would be entitled to minimum wage and overtime pay for a workweek in which she performs such work.
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 was based on whether the services typically require (and are performed by) trained personnel such as registered nurses, licensed practical nurses, or certified nursing assistants.
The determination isn’t based on the actual training or occupational title of the worker performing the services. Performance of medically related tasks during the workweek results in loss of the exemption, and the employee will be entitled to minimum wage and overtime pay for that workweek.
Live-In Domestic Service Employees
Live-in 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 for the 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 periods, or other periods of free time are interrupted by a call to duty, the interruption must be counted as hours worked.
Under the final rule, employers must also maintain an accurate record of hours worked by live-in domestic service workers. The employer may require the live-in domestic service employee to record his hours worked and submit his records to the employer.
Under the final rule, third-party employers of direct care workers (such as homecare staffing agencies) aren’t 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 the employee is jointly employed by the third-party employer and the individual, family, or household using the services.
The individual, family, or household, however, may claim any applicable exemption. Therefore, even if there is a third-party employer, the individual, family, or household will not be liable for unpaid wages under the FLSA if the requirements for an applicable exemption are met.
Paid Family or Household Members
In recognition of the significant and unique nature of paid family and household caregiving in certain Medicaid-funded and other publicly funded programs, the DOL determined that the FLSA doesn’t necessarily require that once a family or household member is paid to provide some homecare services, all care provided by the family or household member is part of the employment relationship.
When applicable, the DOL will not consider a family or household member with a preexisting 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 the consumer’s representative), usually called a plan of care, that reasonably defines and limits the hours for which paid homecare services will be provided.
When the law became effective just over 2 years ago, the final rule narrowed the definition of “companionship services” and prohibited third-party employers, such as homecare agencies, from claiming the companionship or live-in exemptions, though individual, family, or household employers may still claim the exemption if the other conditions are met.