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DOL Delays Enforcement of Changes to the Companionship Exemption

Home Health Agency -- Services to Elderly

Traditionally, home care workers for the elderly and disabled have been “exempt employees,” who were not covered by the Fair Labor Standard Act.  In late 2013, the Department of Labor announced changes to the so-called “companionship exemption.”  Under the new rule, “direct care workers employed by third-party employers, such as home care agencies, will receive [the FLSA’s] minimum wage and overtime protection[s].”  The new rule will affect roughly two million workers, and it’s scheduled to take effect on 01.01.15 — which is right around the corner.

Earlier today, at the urging of disability rights groups and home health agencies, the DOL announced that it will delay enforcement of the new rule for a six month period.  So the rule itself will still go into effect on 01.01.15, but the DOL won’t enforce it until after 06.30.15.  And from 07.01.15 through 12.31.15, the DOL will exercise discretion in deciding whether to bring enforcement actions, taking into consideration the extent to which a home health agency has made good-faith efforts to bring its programs into line with the Final Rule.  This afternoon, the DOL issued a statement explaining its “time limited non-enforcement policy.”

The Department recognizes . . . that the implementation of the Final Rule raises sensitive issues. In particular, the Department has been committed to assisting the regulated community in considering methods of complying with the FLSA in a manner that avoids harmful impacts on the individuals who rely on home care. Additionally, the Department has historically provided compliance assistance prior to the enforcement of new regulations, and it will continue to focus on such assistance during the initial stages of implementing the Home Care Final Rule. Given the unique effects of this rule, the Department has been committed to providing extensive compliance assistance, reaching out to all 50 states individually and providing other varied technical assistance to States and other stakeholders. Therefore, the Department is announcing that between January 1, 2015 and June 30, 2015, it will not bring enforcement actions against any employer as to violations of FLSA obligations resulting from the Final Rule. . . . This initial non-enforcement policy will apply to all employers. During this six-month period, the Department will concentrate its resources on continuing to provide intensive technical assistance to the regulated community, in particular State agencies administering home care programs, regarding the Final Rule and the application of the FLSA to home care arrangements. Although the Department will not conduct formal investigations of potential FLSA violations during this time, any information received during this time period suggesting non-compliance with FLSA requirements will be used as an opportunity to provide additional technical assistance to States and other potential employers in order to facilitate efficient and effective implementation of the Final Rule.

Make no mistake, this is big news.  This short six-month window affords home care companies a final opportunity to update their practices, in anticipation of a rule the DOL will undoubtedly be rigorously enforcing.  If your company would be affected by the Final Rule and you haven’t yet prepared for it, now’s the time.



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