Home health aide
agencies recently got some good news from the U.S. Supreme Court: home health
care aides and other companions employed by agencies or other third parties
aren’t eligible for minimum wage and overtime compensation under federal law.
We’ll explain the case and how it applies here in
Home Aide Files Overtime
Suit
The case was brought by
Evelyn Coke, a domestic worker who provided companionship services to elderly and
infirm men and women in
Coke sued her employer, Long Island Care at Home, Ltd., alleging that the
company didn’t pay her overtime wages, in violation of the federal Fair Labor
Standards Act (FLSA).
The employer asked the
court to dismiss the suit because Coke and workers like her are exempt from overtime
compensation. The employer relied on a U.S. Department of Labor (DOL)
regulation creating an FLSA minimum wage and overtime exemption for “companionship”
workers who “are employed by an employer or agency other than the family or
household using their services.” Coke countered that the regulation was invalid
because it conflicted with another DOL rule and with Congress’s intent to
provide broad wage protections for all workers.
A trial court dismissed
Coke’s overtime suit, ruling that the DOL’s companionship exemption rule was valid.
A federal court of appeals, however, rejected the regulation (in two separate
rulings) and reinstated Coke’s case.
Paying Overtime: 10 Key Exemption Concepts
Only one thing really matters in the determination as to whether or not an employee is exempt: The duties the employee performs. Learn how to avoid costly, preventable mistakes with our free White Paper, Paying Overtime: 10 Key Exemption Concepts.
No Overtime for
Companionship Workers
Now the U.S. Supreme
Court, in a unanimous decision, has backed the DOL exemption rule, finding that
companionship workers like Coke who are employed by an agency or another
third-party employer are indeed exempt from FLSA minimum wage and overtime requirements.1
The high court explained
that the FLSA contains a broad exemption for “any employee employed in domestic
service employment to provide companionship services” for ill or elderly
individuals. The court pointed out that the DOL issued two regulations to clarify
this exemption. One regulation defines “domestic service employment” to mean
services of a household nature performed by an employee in the private home of
the person by whom he or she is employed. This definition alone suggests that
companionship workers employed by a third party or agency wouldn’t qualify for
exemption. The second regulation, however, states that exempt companionship
workers include those employed by an agency or third party.
Coke argued that the
term “domestic service employment” and its definition in the first DOL rule clearly
meant that the exemption applied only to those workers employed by people who
themselves receive the services. But the high court pointed out that the FLSA
gives the DOL authority to issue regulations working out the details of the
FLSA exemption, and whether to include workers paid by third parties “is one of
those details.”
3
Scope of Exemption
This decision makes it
clear that home health aides and other workers who provide in-home
companionship services—whether employed by the person they’re providing care
for, a third party, or an agency— are exempt from the FLSA’s minimum wage and
overtime rules.
Keep in mind that the
exemption the Supreme Court addressed applies only to employees who perform “companionship
services.” This includes services for the care, fellowship, and protection of
persons who because of advanced age or physical or mental infirmity can’t care
for themselves. Services include household work such as meal preparation, bed
making, clothes washing, and other similar personal services. General household
work cannot exceed 20 percent of the total weekly hours worked by the companion.
If this 20 percent limit is exceeded, the exemption is lost—which means the
employee must be paid for all hours in compliance with the minimum wage and overtime
requirements of the FLSA.
Impact in
It is important to note
that the Supreme Court’s ruling has a limited impact in California and a
handful of other states—including Colorado, Illinois, Kansas, Michigan,
Minnesota, Nevada, Pennsylvania, Washington, and Wisconsin—with wage and hour
rules that are stricter than the FLSA.
exemption for “personal attendants” who are hired to provide home care to
elderly or ill individuals or children. The exemption applies whether the
worker is employed by a third party or by the individual’s household. These
workers do not have to be paid overtime. However, they are still entitled to
receive the state minimum wage (which now stands at $7.50 per hour and goes up
to $8 per hour on Jan. 1, 2008). As with the federal exemption, the state
overtime exemption will be lost if more than 20 percent of the person’s work is
general household work, as opposed to performing personal services for the
individual being cared for. See the sidebar below for tips on complying with the
exemption.
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1 Long Island Care at
Home, Ltd. v. Coke, U.S. Supreme Court No. 06-593, 2007