Home Care Final Rule Update

November 5, 2015

in Human Resources

As of October 13, the Department of Labor’s (DOL) Home Care Final Rule is in effect.

The Home Care Final Rule, which greatly narrows the home health care and companionship services exemption under the federal Fair Labor Standards Act (FLSA), was slated to go into effect in January 2015. In late December 2014, however, a federal judge struck down its two main provisions, thus delaying its implementation. The DOL appealed, and the Court of Appeals ruled in their favor. Most recently, the Supreme Court announced that it wouldn’t hear the further appeal of the case, which cleared the way for the rule to proceed.

The Final Rule will make almost two million home care workers who were previously classified as exempt eligible for minimum wage and overtime under the FLSA. In addition to narrowing the definition of “companionship services” for the exemption, third party employers of direct care workers are no longer permitted to claim the exemption for companionship services or live-in domestic service employees; their employees will have to be paid minimum wages and overtime even if the services rendered would otherwise meet the home care criteria for exemption.

While the official effective date was October 13, the DOL won’t begin enforcement of the rule until November 12, and then only with limited and targeted prosecutions. Full enforcement will begin January 1, 2016.

In the meantime, however, employees can still make their own wage claims, so we recommend working toward compliance as quickly as possible. Home care companies should review their policies to ensure their employees are paid at least minimum wage and any applicable overtime.

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