In Home Health Care Aids No Longer Exempt From Minimum Wage and Overtime Benefits

By: Steven DeSena

After almost two years after President Barack Obama first pledged to update the  “companionship services” exemption to the Fair Labor Standards Act (FLSA), the U.S. Department of Labor issued a final rule on Tuesday extending the law’s minimum wage and overtime protections to in-home workers who care the elderly, ill and disabled.[1] Advocates for this change have long argued that home care workers were wrongly classified into the same “companionship services” category as baby sitters, a group which has been exempt from minimum wage and overtime coverage. [2] In overturning the decades old exemption, minimum wage and overtime benefits will now be extended to a workforce of nearly 2 million home health-care workers, most of which are female and minorities.[3]

In December of 2011, the Labor Department proposed a new rule, one that revised the definitions of “companionship services,” which are exempt from federal minimum wage and overtime protections, to exclude home health workers.[4]  The proposed rule followed the U.S. Supreme Court decision in Long Island Care at Home, LTD. v. Evelyn Coke.[5]  In an opinion by Justice Breyer, the Court held that the Department of Labor regulation applying FLSA’s “companionship services” exemption from minimum wage and maximum hours rules to such services rendered by persons employed by third parties, as opposed to family or household of recipient, is valid and binding, in light of the statute’s text and history, despite different and apparently conflicting regulation.[6]

At the time congress extended benefits to domestic workers when it amended the FLSA in 1974, which exempted babysitters and workers who provide “companionship” services, the workforce of in-home health care providers wasn’t huge and Congress hadn’t conceived this exemption as covering people who provided in-home health care as a profession.[7]  According to Labor Secretary Tom Perez, for nearly 40 years “home-care providers were lumped into the same category as teenage baby sitters when it comes to how much they make.”[8]  As opposed to conventional “baby sitting,” home-care providers typically bathe, dress and feed elderly or disabled patients, and a large percentage of the workers are hired directly by people with disabilities or their families.[9]  The Labor Department said the rule revises the regulations in a way that better reflects Congressional intent given the changes to the home care industry and workforce in recent decades.[10]  However, Marc Freedman, executive director of labor policy for the U.S. Chamber of Commerce believes that the Labor Department’s move contradicts the will of congress and that the result will be that home-care services, which are becoming increasingly more relied upon will become too expensive and beyond the reach of those in need of assistance.[11]

In an unusual move the Obama administration said the new regulation would not take effect until January 1st, 2015, even though regulations often take effect 60 days after being issued.[12]  This delay is to give families that use these attendants, as well as state Medicaid programs, time to prepare for the new rule.[13]  Effected by the new rule, the Labor Department estimates that in the United States there are 1.9 million home-based “direct care” workers, who are typically employed by healthcare agencies, and their median pay in 2010 was $9.70 per hour, or about $20,000 per year.[14]


[1] Abigail Rubenstein, DOL Extends FLSA Protections to Home Health Care, Law360, Sept. 17, 2013, available at http://www.law360.com/employment/articles/473444/dol-extends-flsa-protections-to-home-health-care-workers.

[2] Steven Greenhouse, Rule a Boost for Home Care Workers, The Bulletin, Sept. 18, 2013, http://www.bendbulletin.com/article/20130918/NEWS0107/309180335/.

[3] Jim, Efstathiou Jr., Obama Extends Minimum Wage to 2 Million Home Health Aides, Bloomberg, Sept. 18, 2013, available at http://www.bloomberg.com/news/2013-09-17/obama-extends-minimum-wage-to-2-million-home-health-aides.html.

[4] Amanda Becker, Obama to Extend Wage Law to Cover Two Million Home Care Aides, Reuters, Sept. 17, 2013, available at http://www.reuters.com/article/2013/09/17/us-usa-employment-homecare-idUSBRE98G10F20130917.

[5] Becker, supra.

[6] Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 162 (2007).

[7] Efstathiou Jr., supra.

[8] Melanie Trottman & Kris Maher, Labor Department Adds Protections for Home-Health Workers, The Wall Street Journal, Sept. 18, 2013, http://online.wsj.com/article/SB10001424127887323981304579081251516291502.html.

[9] Trottman, supra.

[10] Trottman, supra.

[11] Efstathiou Jr., supra.

[12] Greenhouse, supra.

[13] Id.

[14] Becker, supra.

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