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December 24, 2014

Court Vacates DOL FLSA Regulations Covering Companionship and Live-In Domestic Employees

On December 22, 2014, the United States District Court for the District of Columbia vacated a significant portion of the United States Department of Labor’s regulations that had interpreted the terms “companionship services” and “live-in domestic services” so as to limit the minimum wage and overtime exemptions1 to individuals who are directly employed by the recipient of the services or their household.  Home Care Association of America v. Weil, ECF Docket No. 22, 14 Civ. 967 (RJL), (D.D.C. Dec. 22, 2014).  The regulations, which were scheduled to take effect January 1, 2015, would have extended the coverage of the Fair Labor Standards Act (“FLSA”) to employees of the agencies who performed these services.  In vacating the regulation, the District Court noted that the Department of Labor had overruled a regulation that not only had stood for 40 years but which had been upheld by the United States Supreme Court in Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007).  An appeal is likely, and a final determination awaits a decision from the United States Court of Appeals or the Supreme Court. 

It is important to note that this decision does not disturb any state or local wage and hour laws or regulations applicable to agency workers who perform companionship services or live in domestic services.  The decision also did not disturb that portion of the new regulation changing the definition of activities that would constitute “care.”  Generally, an employee who spends more than 20% of the work day giving care is not providing companionship services.  While the lawsuit, itself, challenged this change, the plaintiffs made a tactical decision not to seek to vacate this portion of the regulation.    Thus, the District Court’s decision does not vacate that portion of the new regulation.  The plaintiffs in the lawsuit, however, have asked the Department of Labor to voluntarily stay the enforcement of that change in the rule pending a decision on that aspect of the case.  While it is not clear whether the Department of Labor will agree to that request, the Department had already indicated that it would not enforce the rule changes for six (6) months – or until July 1, 2015.

We will continue to monitor this case and issue further updates as warranted.  In the meantime, home care agencies that have any questions regarding the exemption, the rules or comparable state and local laws should contact us.

1Employees engaged in companionship services are exempt from federal minimum wage and overtime requirements.  29 U.S.C. Section 213(a)(15).  Employees engaged in live-in domestic services are exempt from federal overtime requirements. 29 U.S.C. Section 213(b)(21).