Changes to Minimum Wage Requirements for Home Care Workers

October 31, 2015 | Employment & Labor | Health Services

In 2014, the United States Department of Labor (“DOL”) issued a new regulation to be effective January 1, 2015 to modify the minimum wage and overtime requirements of home care workers (including companionship and live-in domestic workers).  Prior to the new regulation being effective, a Federal District Court vacated the regulation finding that the DOL exceeded its authority when issuing the regulation.  In August, the U.S. Court of Appeals reversed the decision of the District Court and upheld the issuance of the new regulation.  The DOL has indicates its regulation is set to be effective as of November 12, 2015.

The new regulation introduces significant changes to the pay practices of the home care workers employed by private agencies.  The major changes include:

Third party employers (like private agencies) of home care workers (companion or live-in domestic servants included) will be required to pay the federal minimum wage for all “hours worked” and overtime to such employees, as the statutory exception for “companionship” and “live-in domestic” employees will no longer be available to a third-party employer.  In practice, New York agencies home care workers will now be be entitled to overtime at one and a half their “regular rate of pay” for each hour they work over forty (40) in a payroll week.

The rules modify the requirements to establish and document “hours worked” of home care workers — particularly for live-in domestic employees with the practical effect being that agency may need a written understanding between the live-in employee and agency on non–work time within the 24 hour and a procedure to document and address any deviations from such agreement.  Similarly, with respect to all care workers, agencies are going to be required to carefully document hours worked, home visits and travel time during the day or between patient visits in order to establish “hours worked” each week for their workers.

The exemption for the companionship and live-in domestic employees will continue to exist for individual, family or household employers of such services, even if the worker was obtained through a retained agency.  Although the definition of a companionship subject to the exemption has been narrowed.

As noted above, the rule imposes specific record keeping requirements on all employers with respect to the hours worked and pay of the home care workers.

As the companionship and live-in domestic worker exemptions existed under federal law for decades, these regulations represent a major change in the compensation and pay practices required for agencies.  The DOL has issued numerous fact sheets and compliance advisories with respect to compliance with the new regulation.  Agencies will need to carefully audit and adjust their pay practices to conform to the regulations.  In many cases, this may require a client-by-client evaluation of work time and an adjustment of payroll procedures to minimize added payroll cost and ensure compliance with the new standards.  Our office is available to assist in compliance issues.

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