Insight Minimum Wage and Overtime Changes Affect Home Health Care Industry

Today the US Department of Labor (DOL) made an announcement that will affect companies providing direct health care, such as home health care agencies. The Department of Labor announced its final rule expanding the Fair Labor Standards Act’s (FLSA) minimum wage and overtime protections to many workers who provide home care assistance to elderly people and others.

Since 1974, the FLSA has covered domestic service workers. However, since that time, the FLSA has also provided an exemption for such workers who provide companionship services. The result of this exemption was that employees providing home-based health care for the elderly or those with illnesses, injuries, or disabilities largely fell outside of the FLSA’s minimum wage and overtime protections.

Over the past nearly 40 years, the home health care industry has grown dramatically. Now, many people receive health care services at home rather than in nursing homes or other institutions, and the workers who provide such home care services—certified nursing assistants, home health aides, personal care aides, and caregivers—perform increasingly skilled duties. These direct care workers are quite different than the elder sitters that the FLSA meant to exempt in 1974.

The final rule makes two significant changes to expand the coverage of the FLSA. First, the tasks that qualify for the companionship services exemption have been narrowed. Second, the companionship services exemption, and the live-in domestic service exemption, can no longer be claimed by third party employers such as home health care agencies. Thus, it is anticipated that this rule change will have a significant impact on the home health care industry.

This rule goes into effect on January 1, 2015. If you have questions or need assistance regarding this rule change, please contact our employment group or call 208.344.6000.