Department of Labor Ruling on Overtime Pay
Update: It has been nearly a year since the DOL ruling regarding Overtime Pay has been in effect. It has mostly affected Live-in care which has been made more expensive by the ruling. For companies which anticipated the change in law (like Paradise Home Health Care), and redid their Service Agreements and Time Sheets, the transition has been relatively smooth. Some companies attempt to move clients into two 12 hour shifts, which is the most expensive. It pays to call a few companies to see how they are managing the Overtime and Live in changes in the law.
Regarding Overtime Pay: This Fall (2015) the exemption of overtime pay for caregivers – in home aides – privately or through a licensed company will no longer apply, as ruled by the Department of Labor. Whether you or agree or disagree, change is coming and will affect the caregiver, the client and the Registry or Agency. For folks receiving less than 40 hours a week of care, there won’t be any change, unless the caregiver was earning less than minimum wage – their wage will increase. For people needing more than 40 hours a week of care, and specifically live-in care, adjustments will be made by either paying overtime (time and a half for every hour over 40) or more likely, another caregiver/aide will be introduced onto the case. Live in care will become hourly, with the aide mandated to receive 5 hours of interrupted sleep and whatever other time he or she needs when she is not “working” but present.
Your company is likely speaking to you already and sending out letters to advise you of these changes. New contracts are in order to reflect these changes. Please read below if you feel strongly that the new ruling will adversely affect your care plan in the home. There are actions you can take as this ruling is still being challenged and may reach the Supreme Court.
For private consumers who are not connected to a licensed home care company, they may not even know about these changes, until their caregiver asks them for overtime pay. If you know anyone hiring privately, please let them know about this new ruling and what to expect.
Since 1974, most home care has been exempt from federal overtime and minimum-wage requirements imposed by the Fair Labor Standards Act (“FLSA”). This FLSA exemption for home care, commonly known as the “companionship exemption,” was enacted by the U.S. Congress. In 2013, the U.S. Department of Labor (“DOL”) issued new regulations that effectively repeal the companionship exemption. The new regulations accomplish this repeal by modifying the definition of companionship services so that most home care cannot meet the definition. The DOL’s explanation of this new definition of companionship services is at the following link: http://www.dol.gov/whd/regs/compliance/whdfs79a.htm. The new companionship regulations were slated to become effective January 1, 2015, but the homecare industry challenged the validity of these regulations in federal court. While a federal district court initially held them invalid, the U.S. Court of Appeals for the District of Columbia on August 21, 2015, reversed the district court decisions and upheld the DOL’s new companionship regulations.
The appeals court decision upholding the new companionship regulations is currently scheduled to take effect on or about October 12, 2015. The industry intends to appeal the decision to the U.S. Supreme Court, but the fate of this appeal is uncertain. If the new regulations go into effect, families generally will no longer qualify for the companionship exemption. This means that caregiver employed by a family to provide home care generally will be entitled to be paid a minimum wage for all hours worked and overtime for hours worked during a week in excess of 40.
Importantly, a family that employs a caregiver is subject to the FLSA and can be held liable for any unpaid overtime or minimum wages to which the caregiver is entitled. For these purposes the definition of “employee” is very broad. In light of the DOL’s new regulations, and the litigation contesting their validity potentially coming to an end soon, families should begin to consider how they will respond to these changes. Two possible options – once the new regulations go into effect – are for families to begin paying overtime to caregivers who work more than 40 hours per week (while possibly reducing the hourly rate payable to the caregivers), or to begin working with additional caregivers, so that no caregiver works more than 40 hours in any week. It is important to reiterate that these FLSA changes apply directly to a family that employs a caregiver.
If you would like to let your government know how these changes will affect you and your family, the following is contact information that could assist you. Send an Email to US Department of Labor Secretary Perez Email Secretary Perez at: TalktoDOL@dol.gov Contact the White House Email the President at: http://www.whitehouse.gov/contact/submit-questions-and-comments Call the President at: Comments: 202-456-1111 Locate and Email or call your Congressman at: http://www.house.gov/representatives/find/ Locate and Email or call your US Senators at: https://www.senate.gov/general/contact_information/senators_cfm.cfm?State For example, if you are unhappy with the changes, you might consider a message along the lines of “I am [calling/writing] to make you aware of how the new regulations changing the companionship exemption to the Fair Labor Standards Act will disrupt our family’s ability to arrange home care for our ______________. These changes create a hardship for our family and for the caregivers we work with. I urge you to revoke these Fair Labor Standards Act changes and restore the companionship exemption.”