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DOL Concludes FLSA Applies to Home Care Workers Employed by Third-Party Agencies

In August 2015, the United States Court of Appeals for the District of Columbia upheld a Department of Labor (“DOL”) regulation extending the Fair Labor Standards Act (“FLSA”) minimum wage and overtime provisions to employees of third-party agencies who provide companionship services and live-in care within a home. Home Care Association of America v. Weil, 799 F.3d 1084 (D.C. Cir. 2015). It is estimated the ruling affects almost two million workers who provide home care to the elderly and disabled.

The FLSA exempts from the FLSA protections two types of domestic service workers: those who i) provide “companionship services” and ii) live in the home where they work. The question presented in the Weil case was whether those exemptions “were limited to persons hired directly by home care recipients and their families? Or do they also encompass employees of third-party agencies who are assigned to provide care in the home?” Id. at 1087. 

In 1975, the DOL interpreted the FLSA as including all such workers and drafted the regulations accordingly. The FLSA was passed in an era when most professional care took place at hospitals and nursing homes rather than in patients’ homes. The growing demand for long-term home care services has transformed and professionalized the home care industry such that residential care increasingly is provided by professionals employed by third-party agencies rather than by workers hired directly by care recipients and their families.  

In 2013, in response to this trend, the DOL adopted regulations reversing its position on whether the FLSA exemptions should apply to employees of third-party agencies who are assigned to provide care in the home. Based on the revised regulations these employees now have the same FLSA protections as their counterparts who provide the same types of services in an institutional setting rather than in patients’ homes. 

In affirming the revised regulations, the D.C. Circuit concluded that Congress delegated to the DOL the authority “to determine whether employees of third-party agencies should fall within the scope of the companionship services and live-in worker exemptions.” Id. at 1093. The D.C. Circuit found that DOL’s interpretation was “entirely reasonable” and consistent with Congress’s intent. Id. At 1093–94. In other words, Congress intended the exemption to apply narrowly to “casual” workers in the home, whereas home care workers employed by third parties are typically “professional caregivers, often with training and certification, who work for agencies that profit from the employees’ services.” Id. at 1094. The DOL felt the exemption was not intended to apply to those for whom the work is a “vocation,” and the shift in policy via the revised regulations was justified “based on the dramatic transformation of the home care industry since the [third-party employer] regulation was first promulgated in 1975.” Id. at 1095.

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