All posts tagged 'companionship'
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USDOL Guidance Released On "Adult Foster Care", "Shared Living Arrangements"

April 15, 2014 01:18
by Ted Boehm

We reported earlier that the U.S. Labor Department has issued a Final Rule re-stating the requirements for and limitations upon the federal Fair Labor Standards Act's Section 13(a)(15) "companionship exemption".  The changes are effective in January 2015.  As has been widely discussed, this exemption will then no longer be available to third-party employers under the new regulations.

These regulations will also affect the Section 13(b)(21) overtime exemption for so-called "live-in domestics", that is, employees employed in domestic service in a household who reside in that household.  Beginning in January, third-party employers will not be able to rely upon the exemption for these employees.

Changes Provoked "Shared Living" Questions

USDOL's revisions prompted many stakeholders to voice concerns about other FLSA-related nuances of "shared living" arrangements.  The agency recently responded with Administrator Interpretation No. 2014-1, which addresses how the FLSA applies to "adult foster care" or "shared living arrangements".

The guidance focuses upon living arrangements in which one or two "consumers" of services and a "provider" of those services share a home, as opposed to group-home settings or facilities having multiple workers and shifts.  In its illustrations of typical shared-living arrangements, USDOL gives the example of a "college student moving into the extra bedroom in a home owned by an 80 year old man who needs assistance with bathing and dressing in the mornings . . .."  The student would be the service "provider", and the homeowner would be the "consumer" of those services.

USDOL gives another example of a "consumer [who] moves into the home of the provider and becomes part of the provider's family, sharing in family meals and activities . . . [and] the provider provides constant care and attention to the consumer, including by transporting him to his doctor's appointments . . .."  Here, the tenant is the "consumer" of services, while the homeowner is the service "provider".

Is The Provider An FLSA "Employee"?

Particularly noteworthy is the analysis of whether an employment relationship exists in the shared-living arrangement:

♦   Between the provider and the consumer, or

♦   Between the provider and a third-party who facilitates the arrangement.

As a part of that evaluation, USDOL provided some "rules of thumb" centering on the location of the living arrangement.

The Interpretation suggests that, when the consumer moves into the provider's home, in "most circumstances" USDOL is likely to deem the provider not to be the consumer's employee.  USDOL's rationale is that the provider typically determines the schedule and routine within his or her own home so as to control the conditions of work, that is, the provider is not taking direction from the consumer.  Conversely, the guidance suggests that it will "often . . . be the case that a provider who moves into the home of a consumer is the consumer's employee."

The factors for determining whether a provider is an employee of a third-party facilitator include things like:

♦   The degree of oversight the third-party exercises over the arrangements and other surrounding circumstances;

♦   Whether the arrangement occurs in the provider's house (which might tend to favor a finding of non-employment) or a separate location (which might tend to favor a finding that the provider is employed by the third-party); and

♦   Whether the provider must seek the third-party's permission for vacations, days off, or other absences, instead of simply providing notice of these occurrences.

The Bottom Line

The Administrator Interpretation provides further insight into how USDOL will analyze certain aspects of shared-living arrangements.  It might even influence how courts view them.

But the guidance is by no means exhaustive or conclusive.  For one thing, litigation about whether someone is an independent contractor under the FLSA will not abate anytime soon, and courts are not bound by what USDOL says.

Instead, whether a provider is found to be an FLSA employee is ultimately going to depend upon of a variety of factors under the less-than-precise "economic reality" test.  For instance, the location of the services provided could be outweighed by other considerations in particular situations.  Even USDOL's guidance itself is hedged with qualifiers such as "generally", "often", "most circumstances", and so on.

Providers subject to the FLSA who are non-exempt employees must be paid in compliance with that law's minimum-wage, overtime, and timekeeping requirements.  Some such providers employed by third-parties might be exempt from those requirements today but no longer will be in January.

Employers of such providers should immediately evaluate what they must do or plan to do ensure FLSA compliance.  This analysis should take into account unique ways in which the FLSA affects these relationships, such as how to determine hours worked generally, how to treat sleep-time, and many other considerations.

 

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Companionship-Exemption Regulation To Be Released (Updated 09 20 13)

September 17, 2013 09:06
by Ted Boehm

Months after its April 2013 target date, the U.S. Labor Department announced this afternoon that it is issuing a Final Rule re-stating the requirements for and limitations upon the "companionship" exemption in the federal Fair Labor Standards Act's Section 13(a)(15).  USDOL reportedly will publish the actual regulation in the Federal Register "on or about October 1."

As readers will recall from our prior posts, this exemption says that the FLSA's minimum-wage and overtime requirements do not apply to employees "employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves . . .."

The Final Rule apparently becomes effective over a year from now, in January 2015.  Judging from USDOL's statements today, the exemption's parameters will be changed substantially.

Among the most-significant modifications will be that third-party employers, such as home-care staffing agencies, will no longer be able to assert the exemption for their employees performing companionship work.  USDOL says that this will be true even when the employee is jointly employed by both the third-party provider and the individual or family receiving the worker's services.  Only the individual, family, or household employing a companionship worker will be able to rely upon the exemption (provided that the other exemption criteria are also met).

Another noteworthy change appears to be that the scope of the phrase "companionship services" will have been narrowed considerably.  Reflecting USDOL's contention that the exemption should be primarily focused upon "fellowship and protection", exempt status would be lost if the companionship worker performs more than an incidental amount of "care" services (for example, dressing, grooming, meal preparation, driving, etc.).  Under the coming rule, the exemption would be lost for any workweek in which "care" services exceed 20 percent of the employee's total hours worked in that workweek.

We will be examining the Final Rule in greater detail once it appears in the Federal Register.

 

UPDATED 09 20 13:   We link below to a copy of what we understand to be the pre-publication version of the Final Rule package that USDOL says it will publish in the Federal Register "on or about October 1."

The actual changes at the document's conclusion are of course the heart of the matter, but USDOL's explanatory comments, views, rationales, and statements of intention are indispensable to an understanding of what is being done.  The material will also be important to any who decide to mount a court challenge to the validity of USDOL's changes.

 

29 C.F.R. Part 552 Final Rule.pdf (1.36 mb)

 

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Exemptions And Exceptions | Final Regulations

Input Might Still Be Possible On Proposed "Companionship" Restrictions (Updated 12 27 12)

December 26, 2012 02:14
by Ted Boehm

Readers will recall our earlier posts (accessible here) relating to the U.S. Labor Department's proposed regulatory revisions that would significantly limit the application of the federal Fair Labor Standards Act's Section 13(a)(15) exemption for companions.  While the period for public comment on these proposals closed in March, a letter from an organization representing the interests of the disabled community, the National Council on Disability, demonstrates that it might not be too late to influence the outcome through other avenues.

A copy of correspondence from NCD to USDOL recaps an August meeting in which the NCD expressed its concerns that the proposed rule could have a "devastating impact on the community of Americans with disabilities" who rely upon domestic-service providers.  NCD urged DOL to engage in a "negotiated rulemaking process" with the disability community in order to minimize these negative effects.  NCD also offered to serve as a facilitator during that process, including by offering research and identifying experts to provide input that would become a "formative part of the final rule."

Whether or in what way USDOL has responded to NCD's overture is unknown.  However, USDOL's taking into account thoughtful, considered contributions like those NCD has offered could certainly lead to a better outcome than basing final action upon the thousands of form-letter comments submitted earlier.  For example, it is at least possible that the proposals could be changed to ensure that the exemption remains available to third-party companionship-service providers through whom many disabled persons secure those services.  Whatever the likelihood is that there will be such a modification could be improved by USDOL's having a greater amount of high-quality information on the subject.

USDOL has not yet published a date for releasing a final rule, but the release might nevertheless come without forewarning.  Interested parties might want to consider promptly joining the NCD's call for a "negotiated rulemaking process."

 

UPDATE 12/27/12:   USDOL now projects that the final rule will be released in April 2013.

 

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Exemptions And Exceptions | Proposed Regulations

Senators Move To Preserve FLSA's "Companionship" Exemption

June 15, 2012 00:40
by Ted Boehm

There have been further developments regarding the U.S. Department of Labor's proposed regulation that would drastically limit the Fair Labor Standard Act's Section 13(a)(15) "companionship" exemption.  A collection of our posts relating to these matters can be accessed here.

The comment period for the proposed regulation closed on March 21, but the fight over the exemption continues with the Senate's recent entry into the fray.  A group of 11 Republican senators has introduced S. 3280 to block the proposed regulation.  The "Companionship Exemption Protection Act" would amend the FLSA to preserve the current state of the exemption.

Two of the bill's sponsors, Senators Alexander (R-Tenn.) and Johanns (R-Neb.), argue that the proposed regulation would drive up the cost of in-home care and would force families to institutionalize seniors, thereby straining state Medicaid budgets.  Their proposal is a more-elaborate take on the matter than is the identically-named H.R. 3066, introduced in the House of Representatives last September by Nebraska Republican Lee Terry.  One feature the bills have in common is that each would remove the Secretary of Labor's authority to "define[] and delimit[]" the exemption.

The companionship exemption provides that the FLSA's minimum-wage and overtime requirements do not apply to employees "employed in domestic service employment  to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves . . .."  However, USDOL's proposed regulation would revised the exemption by, among other things, significantly reducing the scope of exempt activities and making the exemption inapplicable to workers employed by third-party staffing agencies.  The most significant practical impact of the proposed regulation would be that far fewer individuals would qualify for the exemption.

As we previously noted, proponents of the effort to narrow the exemption initially sought to do so through legislative action.  However, those efforts subsequently shifted to the regulatory arena, most likely on the basis of political considerations.  Now, the battle appears to have come full circle.

Incidentally, neither of these bills would affect the potential impact of USDOL's proposals upon the FLSA's Section 13(b)(21) overtime exemption applying to "any employee who is employed in domestic service in a household and who resides in such household . . .."

 

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Exemptions And Exceptions | Legislation | Proposed Regulations

Proponents "Can't Wait" For Demise of Companionship, Live-In Domestic Exemptions (UPDATED: 03/10/12)

February 24, 2012 01:56
by John E. Thompson  & Ted Boehm

UPDATE (03/10/12):   The U.S. Labor Department has again extended the deadline for submissions.  Comments must now be received by Wednesday, March 21, 2012.

___________________________________________________________________

The U.S. Labor Department has extended the time for commenting upon the proposed provisions that would essentially spell the end of the federal Fair Labor Standards Act exemptions for companions and live-in domestic-service workers.  The new deadline is March 12, 2012.

This extension was announced over the objections of many who favor the curtailment of these exemptions.  The Paraprofessional Healthcare Institute, one of the groups pushing for the changes, put it this way:  "The companionship exemption [restriction] was included as part of President Obama's 'We Can't Wait' agenda, and we wholeheartedly agree."  According to PHI, the fact that more than 2,000 comments have been submitted already is cause for bringing public input to a close.

It is clear that the expected campaign to generate favorable comments has been underway.  As one example, many submissions say this, with little variation:

Along with [GROUP NAME HERE] and on behalf of home care workers across the country, I am writing in support of the Department of Labor’s proposed rule (RIN) 1235-AA05.  Home care workers provide an invaluable service to our older family members and people living with disabilities, working hard to help them stay in their homes.  The proposed rule, which would provide home care workers with minimum wage and overtime protections, is essential to stabilizing the quality and consistency of care for those who need care and to improving the quality of the jobs of those providing that care.  Enacting the rule takes one step toward ensuring a stable and skilled workforce to meet the growing demand for these services.  Thank you for recognizing the essential service home care workers provide by suggesting this rule.  We urge you enact it as soon as possible.

Perhaps the proponents' sense of urgency has been provoked by the fact that workers and employers who would be adversely affected by the proposed rules appear to have been voicing a counterbalancing opposition in greater numbers as the former deadline approached.

Now that the Labor Department has decided that the proposals can wait a little longer, those who wish to offer substantive arguments against them can take advantage of the additional time.  For instance, they might urge the Labor Department to consider the fact that, while Congress authorized it to "define[] and delimit[]" the companionship exemption, no such authority appears in the FLSA's live-in domestic overtime exemption.  Compare 29 U.S.C. § 213(a)(15) with 29 U.S.C. § 213(b)(21).  Moreover, not so long ago, it was the constitutional role of Congress to "enact" FLSA changes thought to be desirable for public-policy reasons.

 

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Exemptions And Exceptions | Proposed Regulations

Clock Now Ticking On "Companionship", Live-In Domestic Restrictions

December 31, 2011 02:52
by John E. Thompson

The U.S. Labor Department has officially published the proposed provisions that would drastically limit the federal Fair Labor Standards Act's exemptions for "companionship" workers and live-in domestic employees.  As we have reported, adopting these proposals in their current form will mean that the proportion of such companions and domestic-service workers who are exempt from that law's minimum-wage and/or overtime requirements will be far smaller than it is today.

The deadline for submitting objections or other comments is February 27, 2012.

The Labor Department has been essentially unresponsive to employers' questions about its intentions as it developed these proposals.  However, it is now clear that, all along, officials have been working closely with proponents and other employee-advocacy groups.  A December 20 telephone conference hosted by the Paraprofessional Healthcare Institute revealed that communications with the Secretary of Labor and others at the Labor Department by those who favor the practical elimination of the exemptions have been "intensive."  This extended to an earlier submission of "thousands" of comments urging the kinds of changes that have now been proposed.

PHI favors restricting the exemptions despite the organization's acknowledgement that these revisions could well be "painful"; that they "may force some consumers to pay more, or receive fewer hours of service"; that "some profit margins may indeed become narrower for a while"; and that "some workers will have fewer hours".

The coalition of proponents will be coordinating another round of numerous statements favoring the changes.  Moreover, one teleconference presenter disclosed that the Labor Department will be keeping tabs on how many incoming comments there are, which is likely a hint that officials are inviting reason to characterize support as having been overwhelming.

Indications are that the result might be preordained.  But even if this is so, employers who are against the proposals have all the more reason to submit their objections and recommendations.  Failing to do so could provide fuel for a later argument (such as in any future litigation questioning the authority for and/or attacking the contents of the revisions) that the "regulated community" expressed little disagreement.

 

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Exemptions And Exceptions | Proposed Regulations

Regulation Proposed to Limit FLSA's "Companionship" Exemption

December 15, 2011 23:32
by Ted Boehm

As we suspected, efforts to eviscerate the federal Fair Labor Standards Act's Section 13(a)(15) "companionship" exemption have now formally moved to the regulatory arena.  The U.S. Labor Department has proposed a regulation that would limit the exemption to a far-narrower segment of those employees who work as in-home caregivers.  This move no doubt reflects a political judgment that legislative measures to amend the FLSA itself (about which we wrote in June) would not emerge from Congress.
 
The Proposed Limitations Are Substantial
 
The exemption provides that the FLSA's minimum-wage and overtime requirements do not apply to employees "employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves . . .."  One of DOL's stated goals is to limit this exemption to companions employed only by the individual, family, or household using the worker's services. Under the proposal, third-party employers, such as those companies existing for the purpose of providing companionship services, apparently could not assert the exemption for their employees engaged in this work.  This would be true even if the employee is jointly employed by both the third party and the individual/family/household.
 
The proposed regulations would also reduce the scope of exempt activities from "fellowship, care, and protection" to "fellowship and protection".  DOL's examples of what would qualify as "fellowship and protection" include walks, watching television, and "incidental, personal care services, such as dressing and grooming."  However, if the companion provided "incidental, personal care services" to an extent that exceeded 20 percent of his or her total hours worked in a workweek, the exemption would be lost for that workweek.  "[G]eneral household work", such as vacuuming and laundry, would also destroy the exemption for the workweek in which it occurs.
 
So What's The Justification?
 
Congress authorized DOL to "define[] and delimit[]" the exemption.  However, DOL's two principal rationales for the proposal appear to have more to do with legislative considerations falling within Congress's bailiwick than with appropriate interpretative rulemaking.
 
First, DOL says that the earnings of in-home caregivers have not grown commensurately with those of the in-home-care services industry generally since the exemption was promulgated in 1975. In addition, DOL predicates its changes upon a perception that today's in-home workers are more properly characterized as professional caregivers as compared to their predecessors in the 1970s, when the statutory exemption was enacted.
 
Objections Must Be Registered Promptly
 
Many believe that the proposal will have significant negative consequences.  If the revision is adopted, they say, this will substantially increase labor costs for third-party employers who can no longer rely upon the exemption.  In turn, this will translate into an far-greater financial burden for individuals, families, and households who have been depending upon those service providers.  Both developments are likely to result in an appreciable drop in companionship jobs and employment opportunities – in other words, the revision would by no means be a job-creator.
 
Anyone wanting to comment on or object to this proposal should act quickly.  Submissions must be tendered within 60 days following the proposed rule's publication in the Federal Register.

 

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Exemptions And Exceptions | Proposed Regulations

Efforts To Curtail The FLSA's "Companionship" Exemption Possibly Moving To The Regulatory Arena.

July 24, 2011 07:34
by John E. Thompson

In late June, we noted legislation introduced in the Senate and in the House of Representatives that would essentially repeal the federal Fair Labor Standards Act's Section 13(a)(15) "companionship" exemption in any practical sense.  U.S. Labor Department regulations and interpretations elaborate upon how and to whom the exemption may be applied.

Recent correspondence (link below) from the 28-member Eldercare Workforce Alliance to U.S. Secretary of Labor Hilda L. Solis suggests that proponents of such a change are re-directing their focus from legislation to regulatory limitations.  This letter urges DOL to take "timely action" by imposing a "revised interpretation of the exemption that will extend greater federal minimum wage and overtime protection under FLSA to the more than 1,500,000 paid home‐ and community‐based care workers who provide essential services to our nation's older adults and people with disabilities."  It is highly likely that the "revised interpretation" this advocates will amount to gutting the exemption by regulation.  Perhaps this reflects a political calculation that the legislative prospects are unfavorable.

For some time now, DOL's regulatory agenda has included a very general item expressing an intention to revisit the exemption.  A number of questions were raised about this in the U.S. Wage and Hour Division's July 13 short-on-transparency "webchat", but these were met repeatedly with DOL's reply that it is "premature" to discuss whatever the looming "proposal" is.  The sole detail to emerge is that DOL expects to publish a Notice of Proposed Rulemaking in October.

While of course it remains to be seen what actually transpires, one may reasonably suspect that at least some of the forthcoming proposal will consist of concepts that also appear in the pending legislation.  For example, the proposal might well say that the exemption cannot apply to a worker who is employed by the agency supplying his or her services to an elderly person or to the person's family.

It is also probable that the time period for commenting on and registering objections to this proposal will be relatively brief.  Those who oppose cutting-back on the "companionship" exemption must be vigilant and should be prepared to act on short notice.

 

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Eldercare Workforce Alliance Letter.pdf (184.20 kb)

Exemptions And Exceptions | Legislation | Minimum Wage | Overtime | Overtime Compensation

Renewed Attempt To Destroy The FLSA's "Companionship" Exemption

June 26, 2011 08:46
by John E. Thompson

Another effort is afoot to limit the federal Fair Labor Standards Act's Section 13(a)(15) "companionship" exemption to the point of non-existence in any practical sense.  Last week, apparently-identical bills (S. 1273 and H.R. 2341 -- see currently available version below) were introduced in the Senate and the House which would have precisely this effect.  Similar measures were proposed last year, but the newer ones would impose even-narrower restrictions.

The FLSA's minimum-wage and overtime requirements do not apply to "any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves .  .  .."  "Domestic service employment" refers to services of a household nature the worker performs in or about the private home of the person by whom he or she is employed.  The term "companionship services" means providing care, fellowship, and protection to people who cannot care for themselves due either to advanced age or to physical or mental difficulties.  Additional U.S. Labor Department regulations and interpretations explain how and to whom the exemption may be applied.

If the proposed amendment becomes law, only an employee employed "on a casual basis" to provide companionship services could be eligible for exemption under Section 13(a)(15).  In turn, the phrase "on a casual basis" would be defined so as to make the exemption available only if:

♦   The companionship employment is irregular or intermittent;

♦   The work is not performed by someone whose vocation is to provide companionship services;

♦   The worker is employed only by the family or household using his or her services, rather than by another employer or agency (this is almost certainly designed to exclude even joint-employment arrangements involving, for instance, the worker, a home-healthcare agency, and the service recipients);

♦    The worker's employment by the employer is limited to no more than five hours "per week" (whether a calendar week, a workweek, or some other kind of "week" the bills do not say, nor do they clarify whether the five-hour limit is to be viewed as an average or as an each-"week" proposition); and

♦    The worker's employment by the employer may not extend beyond a "time period" of twelve "weeks" in a calendar year.

These last two restrictions are more stringent than was their counterpart in last year's proposed changes.

It is likely that most employees providing companionship services (and apparently all such workers employed by home-healthcare agencies and similar organizations) would no longer fall within the amended exemption.  It is entirely foreseeable that, instead of improving the circumstances of "direct care workers" and "older adults" whom the amendment purports to help, the changes would expose the interests of both groups to the principle of unintended consequences at the worst-possible time.

The bills have been referred to legislative committees at this point, so it does not appear that there will necessarily be immediate action.  Nevertheless, the Service Employees International Union supports the bills, so opponents of these measures should take them seriously and should waste no time in making their views known to their Senators and Representatives.

 

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S.1273 H.R. 2341.pdf (49.95 kb)

Exemptions And Exceptions | Legislation | Minimum Wage | Overtime | Overtime Compensation

FLSA's "Companionship" Exemption In Peril

August 7, 2010 08:42
by John E. Thompson

If a recently proposed amendment becomes law, the federal Fair Labor Standards Act's Section 13(a)(15) exemption for certain "companionship" employees will essentially be eliminated.

The FLSA's minimum-wage and overtime requirements do not apply to "any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves .  .  .."  "Domestic service employment" refers to services of a household nature the worker performs in or about the private home of the person by whom he or she is employed.  The term "companionship services" means providing care, fellowship, and protection to people who cannot care for themselves due either to advanced age or to physical or mental difficulties.  Additional U.S. Labor Department regulations and interpretations limit how and to whom the exemption may be applied.

H.R. 5902 and S. 3696, introduced respectively by Representative Linda Sánchez (D-CA.) and Senator Robert Casey (D-PA.), would narrow the exemption's scope so much that it would be largely meaningless.  The amended exemption would be available only if:

•    The companionship employment is irregular or intermittent;

•   The work is not performed by someone whose vocation is to provide companionship services;

•   The worker is employed only by the family or household using his or her services (presumably, this is intended to exclude even joint-employment arrangements involving, for instance, the worker, a home-healthcare agency, and the service recipients); and

•    The worker performs the services for no more than 20 hours per week in the aggregate, taking into account all of the work done for the family or household employers served.

As a practical matter, this would mean that most employees providing companionship services (and apparently all such workers employed by home-healthcare agencies and similar organizations) would no longer be exempt.  Both bills have been referred to the appropriate legislative committees at this point, so it does not appear that action is imminent.  Even so, it is not too soon for opponents of these measures to make their views known to their Senators and Representatives.

 

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Exemptions And Exceptions | Legislation | Minimum Wage | Overtime | Overtime Compensation


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