FLSA Companionship Services Exemption Will Narrow in 2015
The federal Department of Labor (DOL) recently issued a Final Rule amending the regulations applicable to the companionship services exemption from the Fair Labor Standards Act (FLSA) minimum wage and overtime requirements. The existing regulations have been generally unchanged since their promulgation in 1975. The new regulations do not become effective until a year from now on January 1, 2015.
The general effect of the amendments is to narrow the applicability of the companionship services exemption and thus expand the group of such domestic service workers who will be entitled to receive minimum wage and overtime protection.
Workers hired to provide companionship services in or about a private residence (permanent or temporary) will continue to be exempt employees. “Companionship services” means the provision of fellowship and protection for an elderly person or a person with an illness, injury or disability who requires assistance in caring for themselves. Examples of fellowship and protection include conversation, reading, games, crafts, going on walks, running errands, and accompanying the person to appointments or social events to monitor the person’s safety and well-being.
Exempt employees may also provide care to the involved individual if the care is provided in conjunction with the provision of fellowship and protection. “Care” includes activities of daily living and instrumental activities of daily living. Collectively such care may consist of day-to-day tasks such as dressing, grooming, bathing, toileting, transferring, meal preparation, driving, light housework, managing of finances and arranging medical care. The new regulations make clear, however, that such care may not exceed 20% of the worker’s weekly hours. If the provision of care exceeds this threshold or if the household work performed primarily benefits other household members rather than just the involved individual, then the exempt coverage is forfeited.
It should be noted that the companionship services exemption does not include persons hired to provide medically-related services. These employees, such as nurses, may be covered under other FLSA exemptions.
Occasionally companionship services are hired through a third-party employer. The amended regulations expressly state that such third-party employers may not avail themselves of this exemption. If the employee is jointly employed by the third-party employer and the person using the services, the individual, family member or household using the services are, however, still entitled to apply the exemption.
Takeaway: Effective as of January 1, 2015, the DOL will narrow the application of the FLSA companionship services exemption. Prior to that time, individuals or households hiring such services should be mindful of the duties restrictions applicable to that exemption and refer to the applicable DOL Fact Sheet.