Home Care Workers Finally Protected by Federal Minimum Wage and Overtime Laws

On September 17, 2013, the U.S. Department of Labor released its final rule extending federal minimum wage and overtime protections to approximately two million home care workers who care for the disabled, ill, and elderly.  The new rule narrows the companionship exemption under the Fair Labor Standards Act (“FLSA”).  The final rule was announced nearly two years after the Obama administration first proposed the rule and after receiving approximately 26,000 public comments.  The Department of Labor issued the new rule because the home care industry has radically changed and grown since Congress created the companionship exemption.

Since 1974, “domestic service” employees have been covered by the FLSA and have included cooks, housekeepers, maids, and gardeners.  However, there were three exemptions under the FLSA relating to “domestic service” workers: (1) casual babysitters, (2) those providing “companionship services” such as companions for elderly persons or persons with an illness, injury or disability and (3) live-in domestic workers.

The final rule contains significant changes from the prior regulations, including: (1) the tasks that comprise “companionship services” are more clearly defined and (2) exemptions for live-in domestic service employees and companionship services are limited to the family, household, or individual using the services.  The new rule prohibits third party employers, including home care agencies, from claiming live-in or companionship exemptions.  The final rule with become effective on January 1, 2015 in order to give Medicaid programs and families who use these home care workers time to prepare.

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