(January 11, 2012)
Background
At the time of the enactment of the Fair Labor Standards Act of 1938 (FLSA), certain employee classifications were determined to be exempt from the minimum wage and overtime regulations. The Act’s original intent was to establish standards for minimum wages, maximum working hours and child labor in industries. In this Act, an exclusion applied to “any employee employed on a casual basis in domestic service employment to provide babysitting services or any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves (as such terms are defined and delimited by regulations of the Secretary).”
The FLSA was amended in 1974 and these amendments added domestic service employee classifications to those employees covered by the minimum wage and maximum hours provisions. However, even with these amendments, the Act still contains the companionship services exemption.
Current Industry Status
Community health providers, such as private duty, home health and hospice organizations, have found the companion exemption from the FLSA wage and labor regulation’s interpretations to be an area that often leads to confusion. The domestic employees (i.e., companions) usually provide companionship services to the elderly in their home and can provide extended hours including overnight and live-in services as part of their scheduled work. Although the Act does not specifically cover the companion, the home health industry has been a target for lawsuits seeking to challenge the companionship exemption application.
US Department of Labor (DOL) Actions
It has been noted by industry statistics and leaders that the field of home care is a growing employment opportunity and that non-professional workers providing direct services tend to be underpaid. This is indicated to be a direct result of the existing FLSA exemption in that it does not protect this field of work. The companionship exemption is currently being reviewed by the DOL and proposed rulings have been issued. These proposed revisions would directly impact the community health provider’s operating and direct costs for providing companion, live-in and overnight services.
The DOL began the review process with an outreach to all stakeholders. These efforts sought to gather input and information relative to the current industry standards and services. During the review process, a proposed rule was forthcoming, followed by the usual public review time period, which allowed for the submission of comments. The next step in rulemaking is that a final regulation is issued (i.e., notice of proposed rulemaking (NPRM)). This proposed final rule, in which the companionship exemption is significantly narrowed, is supported by the White House as well as advocates that have worked to bring about these changes. The proposed final rule is considered an improvement of the working conditions for this community care employee group.
Industry Impact
While the revisions to the FLSA companion exemption addresses home care workers’ concerns, the provider organization still needs to incorporate these revisions into its wage and salary structure and into its charges for services. These changes will need to incorporate not only daytime, Monday through Friday service charges, but also evening, nighttime and holiday service charges. Hopefully, rising costs for services will not prove to be a barrier to families seeking to obtain services for loved ones with the end result of a win-win situation for providers, workers and those being cared for within their homes. As this final ruling moves forward, it will be important that providers maintain an awareness of its progress and its implications. More information on the final rule recommendation is available by accessing the DOL Web site.
Resources:
Glaser. R. Recent Challenges to the Companionship Services Exemption in the Home Health Industry. Retrieved here on
December 16, 2011.
Wage and Hour Division (WHD). Amendments to the Fair Labor Standards Act (FLSA) Companionship Services Regulations. Retrieved here on December 18, 2011.
Wage and Hour Division (WHD). Notice of Proposed Rulemaking to Amend the Companionship and Live-In Worker Regulations. Retrieved here on December 16, 2011.
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