By Erin Dougherty Foley and Craig B. Simonsen

The U.S. Department of Labor (DOL), due to pending litigation, had not begun to enforce the Fair Labor Standards Act (FLSA) final rule on protections relating to most home care workers, which rules had an effective date of January 1, 2015. That litigation has now concluded, and the DOL rule has been upheld.

The DOL had previously announced a time-limited non-enforcement policy because it was a party to a federal lawsuit regarding the revised regulations. The U.S. Court of Appeals for the District of Columbia issued an opinion in that case which upheld the rule that many home care workers may now be subject to minimum wage and overtime pay protections. Home Care Association of America v. Weil, No. 15-5018 (D.C. Cir. August 21, 2015). The Court of Appeals opinion reversing the District Court’s orders and upholding the rule, became effective on October 13, 2015, when the Court of Appeals issued its mandate to the District Court.

In the underlying rulemaking, the DOL had promulgated changes to its regulations governing the FLSA’s Section 13(a)(15) “companionship” exemption, and the Section 13(b)(21) overtime exemption for “live-in domestics.” The final rule provided that third-party employers would no longer be able to rely on these exemptions. The final rule had been published in October 2013. 78 Fed. Reg. 60454 (Oct. 1, 2013).

In a DOL blog about the final rule, the DOL noted that it “gives these nearly 2 million workers the same basic protections already provided to most U.S. workers – including those who perform the same jobs in nursing homes.” Specifically, under the rule, “direct care workers [such as home health aides, personal care aides, and certified nursing assistants] employed by third-party employers, such as home care agencies, will receive minimum wage and overtime protection.” In other words, home care workers may now be entitled to the same wages as employees performing similar duties in professional healthcare and nursing home facilities. “Workers employed solely by a family or individual may be covered if they are performing medically-related duties or are providing more than a limited amount of care in addition to fellowship and protection.” (Emphasis added.)

In further clarification, as explained in the DOL press release, “direct care workers who perform medically-related services for which training is typically a prerequisite are not companionship workers and therefore are entitled to the minimum wage and overtime.” Also under the rule, individual workers who are employed “only by the person receiving services or that person’s family or household and engaged primarily in fellowship and protection (providing company, visiting or engaging in hobbies) and care incidental to such activities, will still be considered exempt from the FLSA’s minimum wage and overtime protections.” (Emphasis added.)

The DOL has now indicated that it will begin enforcement of the FLSA Final Rule on November 12, 2015. At that time, from November 12 through December 31, 2015, the DOL will be in a “second phase of the time-limited non-enforcement policy,” that it had announced in October 2014, during which time it will “exercise prosecutorial discretion” in determining whether or not to bring enforcement actions, 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.” 79 Fed. Reg. 60974 (October 9, 2014).

For employers, including home-care agencies and other third-party employers, now would be the time to assess whether these exemptions will be available, as they likely may be, and take steps to come into compliance with the FLSA’s minimum-wage, overtime, and timekeeping requirements. Indeed, employers in these industries should be moving toward promptly completing steps in that direction. Consider also whether state or other local laws might require that these same employees be paid minimum-wage and overtime compensation without regard to these FLSA exemptions.

If you have any questions on this topic contact the authors, a member of Seyfarth’s Health Care Practice Group, or your Seyfarth attorney.