New NELP Fact Sheet Clarifies the Final Companionship Exemption Rule

The National Employment Law Project (NELP) released a new fact sheet on the U.S. Department of Labor‘s final regulations on the companionship exemption. The new regulations become effective in January 2015.

The October 2013 fact sheet, Federal Minimum Wage and Overtime Protections for Home Care Workers (pdf), outlines the major regulatory changes made to the Fair Labor Standards Act (FLSA) and their effects on workers, the industry, and the states.

Rule Changes

Two major changes have been made to the companionship regulations, NELP explains.

First, the definition of exempt “companionship services” has been narrowed to cover primarily “fellowship and protection.” A caregiver may, additionally, provide assistance with activities of daily living (ADLS) and instrumental activities of daily living (IADLs), but only in conjunction with “fellowship and protection.” Moreover, assistance with ADLs and IADLs may not exceed 20 percent of the caregiver’s weekly hours. The new regulations clearly define “fellowship and protection” as activities such as “conversation, reading, games, crafts, and accompanying the person on walks, on errands, to appointments, or to social events.”

Second, all home care aides employed by third-party agencies (i.e., a home care agency or state intermediary) are covered by the new rules, which include extending federal minimum wage and overtime protections to this workforce.

The now considerably narrower “companionship exemption” applies only to caregivers hired directly by consumers and their families and who provide exempt services as described above.

Impact

NELP notes that the federal changes will affect states differently, depending on current laws. In 29 states, workers will receive minimum wage and overtime protections for the first time; in 13 states, workers will be covered by a state minimum wage that is higher than the federal minimum wage. In six states, workers will receive new overtime protections.

The rule, however, offers new federal benefits to all home care aides, even in states where workers were covered by state minimum wage and overtime rules. For example, under the federal rules, workers must be paid for travel time between clients, and for time spent providing care during the night. In addition, workers have greater recourse to challenge unfair labor practices through the Labor Department and federal courts.

The application of overtime protections, the issue brief notes, will address a common problem in the industry: excessive hours for a few workers, and many part-time workers who would prefer more hours. Employers will be inclined to spread work more evenly across the workforce, reducing burnout and increasingly overall stability.

— by Karen Kahn, PHI Director of Communications