Starting on January 1, 2015, Many More Domestic Workers Will Be Entitled to Minimum Wage and Overtime Pay

The United States Department of Labor says that “nearly all” of the almost 2 million direct care workers in the United States work for third-party home care agencies, rather than directly for the client who receives their care services. At present, as recently confirmed by the United States Supreme Court’s decision in Long Island Care at Home, Ltd. v. Coke, the Fair Labor Standards Act exempts providers of “companion services” from the FLSA’s general minimum wage and overtime requirements.

The DOL’s “final rule“, which takes effect on January 1st of next year, clarifies and narrows the definition of “companionship services,” requires the recording of hours worked by this category of employees, and–most importantly–precludes third-party providers of home care from claiming the companionship services exemption at all. This means that starting next year the vast majority of home care workers will–at long last–be protected by the FLSA.

Twenty states have at least some state-level requirements regarding the payment of minimum wages or overtime to these workers. But the U.S. population as a whole has a set of extremely inconsistent and often very weak standards regulating the employment of home care workers, and most of those workers are left with few legal protections at all. The disempowerment and underpayment of this population of workers is made all the more worrisome when we consider that the large majority of them are also women and racial minorities.

The FLSA does currently restrict the companionship services exemption to those who i) do not perform medical services that would typically be performed by trained personnel such as nurses, and ii) do not spend more than 20% of their work time doing general household work. These restrictions will remain largely intact after the Final Rule becomes effective next year, with one important change: the new requirements on record-keeping for domestic workers will make employers accountable for following these rules.

Of course, agencies providing home care services and corporate lawyers have complained loudly, arguing that these new rules will make their businesses unprofitable and ultimately make it harder for those who need home care to find it–or to afford it if they can find it. However, as Laura Fortman of the DOL’s wage and hour division pointed out shortly after these policy discussions began in 2013, (at that time) fifteen states already provide(d) overtime and minimum wage protection to home care aides, and “we have not seen any evidence that it has resulted in job loss or any serious negative impact for the workers or for the people using the services.”

Companies that offer home care services will face some compliance challenges, to be sure, and many will have to adopt new practices regarding meal breaks, the length of shifts, job duties assigned to workers, etc. However, even if some health companies’ profit margins are affected, they are companies providing a service, so it is difficult to justify treating their employees differently than all others.

Under the new Final Rule it will remain possible for people who need in-home care to hire directly rather than through a third-party agency, and in that case they will still be exempt from the minimum wage and overtime requirements, assuming those directly-hired workers only perform the duties of a “companion” as the FLSA defines it.

If you are an employee and you believe your rights under the Fair Labor Standards Act have been violated, please contact The Harman Firm, LLP.