Effective on January 1, 2015, a new U.S. Labor Department regulation will extend minimum wage and overtime protections to home care workers, one of the fastest-growing occupations in the country. About two million Americans will benefit from the new policy in that they will now be protected by the minimum wage, overtime, and recordkeeping provisions of the 1938 Fair Labor Standards Act (“FLSA”).
The new rule will end the 38-year-old carve out that had excluded workers who attend to the elderly and disabled in their homes from the basic labor protections enjoyed by most American workers. The home care industry had waged a prolonged lobbying campaign against the proposal, claiming it would raise prices on low-income customers and force companies to cut workers’ hours.
Most hourly workers in the U.S. are protected by the FLSA, which established the federal minimum wage and time-and-a-half for hours worked over 40 in a week. But when Congress amended the law in 1974, it added a “companionship exemption,” which excluded workers who provide “companionship services for individuals who (because of age or infirmity) are unable to care for themselves.”
Those changes effectively carved out home care workers, whose ranks have grown significantly in recent years as the elderly have come to rely on their care. Such workers tend to clients who can’t handle all the basic chores of home life on their own, like bathing, dressing, and eating. According to the Labor Department, the occupation is expected to grow by 70 percent between 2010 and 2020, “much faster” than the average for other jobs in the U.S. economy.
The 1974 statutory text had explicitly granted the Labor Department the authority to define the terms “domestic service employment” and “companionship services” by regulation.
In issuing the new rule, the Labor Department stated that it “believes that the lack of FLSA protections harms direct care workers, who depend on wages for their livelihood and that of their families, as well as the individuals receiving services and their families, who depend on a professional, trained workforce to provide high-quality services.”
The new regulation updates the definition of “companionship services” in order to restrict the term to encompass only workers who are providing the sorts of limited, non-professional services Congress envisioned when creating the exemption. It provides that “companionship services” means the provision of fellowship and protection for an elderly person or person with an illness, injury, or disability who requires assistance in caring for himself or herself. It also defines “fellowship” as engaging the person in social, physical, and mental activities, and “protection” as being present with the person in his or her home, or to accompany the person when outside of the home, to monitor the person’s safety and well-being.
In order to better ensure that live-in domestic service employees are compensated for all hours worked, the new regulation also requires the keeping of actual records of the hours worked by such employees.
The new regulation can be accessed free online here: