On September 17, 2013, the U.S. Department of Labor (“DOL”) announced a final rule that will extend overtime and minimum wage protections to many direct care workers.  The rule is set to go into effect on January 1, 2015.

When the Fair Labor Standards Act (“FLSA”) was enacted, it did not protect workers employed directly by households in domestic service.  Congress amended the FLSA in 1974 to apply to employees performing household services in a private home.  However, that amendment did not apply to certain workers, such as domestic service workers employed to provide “companionship services” to elderly persons or persons with illnesses, injuries, or disabilities.  With the DOL’s new rule, many direct care workers, such as certified nursing assistants, home health aides, personal care aides, and other caregivers will be subject to the minimum wage and overtime requirements of the FLSA. 

Citing a shift in the nature of direct care workers’ duties (from elder sitting to performing increasingly skilled duties) and growth in the industry, the DOL’s final rule makes several changes impacting direct care workers. For example, the rule narrows the definition of the tasks that comprise exempt “companionship services,” and it precludes third party employers (such as home health care agencies) from claiming an exemption for companionship services. Instead, only the individual, family, or household using the services may claim exemptions for companionship services and live-in domestic service employees. The rule also revises the recordkeeping requirements for employers of live-in domestic service employees.

To help explain the new requirements, the DOL has created a website with fact sheets, FAQs, interactive web tools, and other materials. The DOL will also host five public webinars in October.

The likely impact of the DOL’s rule is subject to debate. Unions point to the increased benefits for the workers themselves, while others fear the rule may make home health care unaffordable to many. It could also result in patients being cared for by more workers for shorter shifts, which could be disruptive to patient care.