Agencies and other third-party employers of live-in household employees and home companionship providers, take note: the long-delayed regulations reclassifying many of these workers as non-exempt employees entitled to minimum wage and overtime under the FLSA are now in effect.
Since 1974, the FLSA has included an exemption for certain categories of domestic service workers, including workers who provide “companionship services for individuals who (because of age or infirmity) are unable to care for themselves.” The Act also exempts employees “employed in domestic service in a household and who resides in such household.” In 1975, the U.S. Department of Labor issued regulations holding that these exemptions for companionship workers and live-in household employees apply to employees “employed by an employer other than the family or household using their services.”
In 2013, the U.S. Department of Labor published new rules in which the scope of the companionship and live-in household employee exemptions was limited to individuals employed directly by the family or household, rather than by an outside agency. The new rule was set to take effect January 1, 2015. However, a group of trade-associations representing agencies that employ workers who fell under the revised exemptions filed suit to block the regulation. While they enjoyed some temporary success at the trial court level, in August 2015 the U.S. Court of Appeals for the District of Columbia Circuit ruled that the regulations were a valid exercise of the Department of Labor’s authority to issue regulations under the FLSA. Home Care Association of America v. Weil. The industry groups immediately sought an order staying implementation of the regulations until they could appeal to the U.S. Supreme Court. However, on September 18, 2015, their request for a stay was denied. As a result, the new rules are now in effect.
The Department of Labor stated in a court filing that it will refrain from bringing enforcement actions under the new rule until 30 days after the Court of Appeals issues its mandate. However, because the regulation is currently in effect, third-party employers of domestic service and companionship workers should take immediate steps to comply with the FLSA, notwithstanding the potential appeal to the Supreme Court.
The final rules now in effect are availabe from the Department of Labor’s website here.
The DOL website also offers a fact sheet summarizing the final rule.