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Comment Period on DOL’s Proposed Changes to ‘Companionship Exemption’ Set to Close on March 21, 2012

Posted in FLSA, Wage & Hour

Contributed by Brett T. Lane

The extended period to submit comments on the Department of Labor’s proposed rules affecting the Fair Labor Standards Act (FLSA) ”companionship exemption” is set to close on March 21, 2012. The comment period had originally been set to expire on February 27, 2012, but was extended for two weeks in late February, and then for another nine days in early March.

On December 15, 2011, the White House announced its intention to take administrative action to gut the companionship exemption, which currently exempts from the FLSA’s minimum wage and overtime protections certain workers who provide in-home care to the elderly and infirm. The proposed rule would effectively require employers to ensure that the vast majority of professional caregivers, i.e., home-healthcare workers, are paid at or above minimum wage and are paid time-and-one-half for all hours worked over 40 in a workweek. The White House estimates that as many as 1.79 million workers will be affected by the rule change.

The Department of Labor’s proposed rule will effectively overturn the Supreme Court’s 2007 decision in Long Island Care at Home, Ltd. v. Coke and eliminate application of the companionship exemption to any home-healthcare worker employed by an agency – regardless of the type of duties they are performing. With respect to professional caregivers employed directly by the household in which they provide services, the exemption will be narrowed to apply to individuals who are performing true elder sitter-type duties, such as playing cards, watching television and taking walks.

As the country’s population continues to age, home-healthcare has become a booming industry. The Department of Labor’s proposed rule, should it become final in or near its current form, will require home-healthcare agencies to revisit and likely alter their wage-and-hour policies and practices. Agencies will need to ensure that home-healthcare workers are paid at or above minimum wage for each hour worked and are paid time-and-one-half for all hours worked over 40 in a workweek. Agencies will also need to ensure that home-healthcare workers are paid for travel and waiting time between patient visits, to the extent required by the FLSA, to avoid potential “gap time” claims in addition to claims for failure to pay overtime.

Greenberg Traurig is continuing to monitor the Department of Labor’s proposed regulations in this area, and will provide updates as this sea-change in the law continues to develop.