In September 2013, the U.S. Department of Labor (DOL) published revised regulations concerning application of the federal Fair Labor Standards Act (FLSA) to employees providing in-home companionship services to adults. According to the DOL, the new regulations reflect the fact that the home care industry for elderly or otherwise compromised individuals has grown significantly since 1975, the year in which the DOL last promulgated regulations concerning such domestic service employees. The new regulations, which go into effect on January 1, 2015, extend coverage to a significant number of workers in the home care industry who were previously considered exempt from the FLSA's minimum wage and overtime requirements.

For decades, the FLSA has included nursing homes and assisted living facilities in the scope of its coverage. Also covered have been nurses and other trained professionals who provide care in their patients' homes. However, the FLSA and its regulations expressly exempted from coverage those who provide "companionship services" to elderly people or others requiring assistance in daily living. Implementing regulations defined such services as "fellowship, care, and protection," including "household work…such as meal preparation, bed making, washing of clothes, and other similar services." These services may include housework not to exceed 20 percent of all hours worked in a week. The FLSA also contained an overtime exemption for live-in domestic workers; while employers were required to pay at least minimum wage to such employees and record the time that they worked, employers were not required to pay an overtime premium for hours worked over forty in a given week.

For employers in the home care industry, the most significant change in the DOL's revised regulations is the elimination of any exemption for third-party employers of workers providing either companionship services or live-in domestic services. In the past, staffing agencies that provided home care aides arguably could avail themselves of these exemptions under the FLSA. The DOL's new regulations make clear that the exemptions are not available to these third parties and that all employees providing domestic services through a staffing agency are entitled to minimum wage and overtime compensation.

The new regulations further clarify that the "companionship services" exemption is available only if "fellowship, care, and protection" is provided exclusively to the elderly, disabled or ill person in question. For example, if an employee hired by a family to provide care for an elderly family member spends 20 percent of his time in a week cleaning the family's common living area, the exemption is lost because the employee is providing housekeeping services to the family as a whole, rather than to the elderly family member exclusively. Conversely, the exemption is maintained if the worker spends the same amount of time cleaning only the elderly family member's living area.

Also excluded from the definition of "companionship services" is the administration of medication or provision of services that would typically be provided by trained professionals. An employer may not claim the companionship services exemption for any employee who provides such services and must pay minimum wage and overtime to all such employees.

The DOL has posted a number of fact sheets and questionnaires concerning the new regulations on its website, available at http://www.dol.gov/whd/regs/compliance/whdfsFinalRule.htm. It is advisable for employers in the home care industry to consult counsel to ensure compliance with the DOL's new regulations prior to their January 1, 2014 effective date.