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UPDATE: New Rule Narrowing the Exemptions for Home Care Workers Is Now In Effect

The dust has settled and now it is official:  Businesses that provide home care services can no longer rely on industry-specific exemptions to federal overtime and minimum wage requirements, and the final rule that says so now has the force and effect of law.

Amid uncertainty after a long and bumpy court challenge and despite possible review by the U.S. Supreme Court, the U.S. Department of Labor’s (DOL) rule quietly took effect on October 13, 2015 when the U.S. Court of Appeals for the D.C. Circuit issued its mandate after upholding the rule. According to a DOL policy statement, an additional period of non-enforcement followed for 30 days, ending on November 12, 2015.  Now through the end of 2015, the agency is exercising “prosecutorial discretion” in its enforcement of the rule, “with particular consideration given to the extent to which States and other entities have made good faith efforts to bring their home care programs into compliance with the FLSA since the promulgation of the Final Rule.”  Based on this policy statement, the DOL presumably will begin full enforcement of the rule beginning January 1, 2016.  

According to the D.C. Circuit in its decision upholding the final rule, the “live-in” and “companionship services” exemptions can be narrowed by the DOL to exempt only those qualifying domestic workers who are employed directly by the person for whom they provide services or that person’s family. Thus, unless the employer is also the consumer of their employee’s services, exemptions for live-in workers and companionship employees no longer apply, and businesses must adjust their wage and overtime policies accordingly, if they have not already. Necessary changes include implementing a system for tracking hours worked and calculating overtime pay for employees who are no longer exempt, as well as ensuring that companionship employees who are not already protected under state minimum wage laws receive at least the federal minimum wage for hours worked in each pay period. 

© 2020 Honigman Miller Schwartz and Cohn LLP National Law Review, Volume V, Number 329

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About this Author

Elizabeth Gotham, Honigman, Wage and Hour Compliance Lawyer, Detroit Attorney
Associate

Ms. Gotham is a labor and employment attorney who focuses her practice on assisting with wage and hour compliance and other related matters.  She also served as campaign co-manager for John D. Dingell for Congress Committee prior to attending law school. 

Wayne State University Law School, J.D.

  • summa cum laude; Order of the Coif; Board of Governors Distinguished Scholar; Diana Pratt Legal Research & Writing Merit Award; John Reed Scholar;...

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