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September 24, 2013

DOL Final Rule Extends FLSA Protections
To Domestic Service Workers

On September 17, 2013, the Department of Labor (“DOL”) released its final rule extending the protections of the Fair Labor Standards Act (“FLSA”) to many domestic service workers who had previously been exempted from coverage. The final rule, which becomes effective on January 1, 2015, amends the federal regulations governing the application of the FLSA to domestic service employees, including home care workers.   

Historic Exemption

In 1974, Congress amended the FLSA to extend coverage to domestic service workers. However, in doing so, Congress also created two exemptions that have served to exempt many domestic service workers from FLSA coverage. Specifically, Congress created an exemption from the minimum wage and overtime compensation requirements for domestic service workers who provide “companionships services,” and an exemption from the overtime compensation requirements for live-in domestic service workers.

In Long Island Care at Home, Ltd. v. Coke, the United States Supreme Court held that these exemptions extended not only to companions and domestic service workers who are employed directly by the recipient of the care or members of his/her family, but to employees of agencies (“Third-Party Employers”) with whom the recipient or family members contracted. 551 U.S. 158 (2007). In so holding, the Supreme Court interpreted and applied the DOL’s regulations which extended the exemption to such employees.

Revised Regulations

Among other things, the revised regulations narrow the definition of “companionship services.” Domestic service workers who provide medically related services for which training is typically a prerequisite are not considered “companionship” workers under the revised regulations. Importantly, this remains true regardless of the actual training or occupational title of the employee providing the services.

Under the revised regulations, employers must also now keep actual records of the hours worked by live-in domestic service employees. Previously, the regulations had allowed the employer and employee to enter into an agreement in advance to define working hours and to use such an agreement in lieu of maintaining actual records.

Despite the absence of any intervening change in the law since the Supreme Court’s Coke decision, the revised regulations provide that Third-Party Employers will no longer be able to claim exemptions for companionship services or live-in domestic service employees. Third-Party Employers are defined as employers of direct care workers other than the individuals receiving services or their families or households, i.e. home health care agencies. Thus, under the revised regulations only the recipient, family or household employer may claim these exemptions.

Recognizing the impact of these changes, the Department of Labor has delayed the implementation of the revised regulations until January 1, 2015 – fully a year after they would ordinarily have become effective.

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If you have any questions regarding coverage under the FLSA for domestic service workers please do not hesitate to contact us.