Court Nixes Overtime for Companionship Services Providers

Author: Michael Cardman, XpertHR Legal Editor

January 15, 2015

New regulations that would have made millions of companionship providers eligible for overtime have been voided by a federal court.

The United States District Court for the District of Columbia on January 14 vacated a regulation from the US Department of Labor (DOL) that would have narrowed the duties a companion may perform to qualify for an exemption from the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA). Home Care Ass'n of Am. v. Weil, 2015 U.S. Dist. LEXIS 4401 (D.D.C. Jan. 14, 2015).

The court found that the DOL's regulation conflicts with the FLSA statute. "The statutory language of the exemption makes clear that companionship services are services provided to elderly and disabled individuals who 'are unable to care for themselves.' Now the [DOL] is attempting to issue a regulation that would write out of the exemption the very 'care' the elderly and disabled need, unless it were drastically limited in the quantity provided so as to be of little practical use."

A few weeks earlier, the same court vacated another regulation that would have limited the companionship services exemption to companions employed by the family or household using his or her services. Third-party employers such as health care staffing agencies would have no longer been allowed to claim the exemption, even if the employee were jointly employed by the third party and the family or household.

However, the DOL is expected to appeal the court's rulings, so employers should be prepared for the possibility that the new regulations may be reinstated.

"The Department stands by the Final Rule," the DOL said in a statement. "We believe the Rule is legally sound and is the right policy - both for those employees, whose demanding work merits these fundamental wage guarantees, and for recipients of services, who deserve a stable and professional workforce allowing them to remain in their homes and communities."