EMPLOYER’S CORNER: Appeals court agrees with Labor Department about companionship exemption

There has been ongoing litigation regarding companionship exemption and whether home health care workers employed by third parties would qualify for the exemption.

Initially, in October 2013, the U.S. Department of Labor issued a final rule that revised the companionship exemption. The final rule made some significant changes to the regulations covering companionship workers. These workers had previously been exempt from minimum wage and overtime requirements, provided that a legal test was met.

Under the final rule, employees of third party home health care agencies were excluded from the exemptions and the definition of “companionship services” was narrowed.

In December 2014, the U.S. District Court of Columbia ruled in favor of third-party employers of home health care workers and stopped the implementation of the final rule. The Department of Labor appealed the decision, and the decision was reversed on Aug. 21 by the U.S. Court of Appeals for the District of Columbia circuit.

As such, the final rule is scheduled to go into effect Wednesday. The Department of Labor has stated that it will not begin enforcement of the final rule for another 30 days. The Department of Labor says that “From Nov. 12 until Dec. 31, 2015, the Department will be in the second phase of its previously announced time-limited non-enforcement policy, during which it will exercise prosecutorial discretion in determining whether to bring enforcement actions, with particular consideration given to the extent to which States and other entities have made good faith efforts to bring their home care programs into compliance with the FLSA since the promulgation of the Final Rule.”

The Department of Labor also says that it “has led an unprecedented implementation program to help employers of home care workers prepare for FLSA compliance, including offering an extensive and individualized technical assistance program, providing a 15-month period before the effective date and adopting a time-limited non-enforcement policy.”

The plaintiffs, associations that represent home care staffing agencies, asked the Supreme Court to suspend the final rule pending its request for Supreme Court review of the District of Columbia Circuit court decision. The Supreme Court denied the stay, meaning that the DOL is free to begin enforcing the final rule.

If you have questions about this, or any other wage and hour and issues, you should seek legal counsel from an experienced labor and employment lawyer.

Sarah Phaff is an employment law attorney in Atlanta and Macon at the national labor and employment law firm of Constangy, Brooks, & Smith LLP.

This story was originally published October 13, 2015 at 9:32 PM with the headline "EMPLOYER’S CORNER: Appeals court agrees with Labor Department about companionship exemption ."