Companionship Exemption Ruling Effective Today

On August 21, 2015, a US appeals court again limited the Fair Labor Standards Act's (FLSA) companionship exemption.  (Click here to read more about the ruling.) If not appealed, the ruling will require home health care employment agencies and other third-party employers to pay minimum wage and overtime to domestic workers providing in-home care for the elderly, sick, or disabled.

Although the Department of Labor (DOL) has taken the position that the court's opinion becomes effective today, October 13, 2015, it has promised not to begin enforcing the rule until November 12, 2015. The DOL also has announced a second phase of its limited non-enforcement policy which will occur during the period of November 12 through December 31, 2015. During this second phase, it has stated that it will exercise prosecutorial discretion in determining whether to bring enforcement actions, giving consideration to the extent to which employers have made good faith efforts to bring their home care programs into compliance with the FLSA.

Home healthcare employers should execute their plan to reclassify employees from exempt to non-exempt status. When creating and executing the reclassification plan, employers should consider:

Loss of the companionship exemption will cause new challenges for home health care employers, but with an action plan in place, the challenges can be managed.

Spotts Fain publications are provided as an educational service and are not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.


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