Department of Labor Targets Home Healthcare Industry

Ron Chapman, Jr.
Board Certified—Labor & Employment Law— Texas Board of Legal Specialization
Ogletree Deakins 8117 Preston Rd., Suite 500 | Dallas , TX 75225 | Phone 214.987.3800

The Department of Labor (“DOL”) is increasingly focusing its oversight powers on the home healthcare industry. On December 27, 2011, the DOL published a notice of proposed rulemaking that would provide minimum wage and overtime protections for workers who provide in-home care services to the elderly and infirm. Historically, federal minimum wage and overtime laws have not applied to home health workers. The DOL’s proposal would change that. Specifically, if implemented, the proposal will revise the companionship and live-in worker regulations under the Fair Labor Standards Act (the “FLSA”) to define the tasks that may be performed by an exempt companion, and will limit the companionship exemption to companions employed only by the family or households using the services. In addition, the DOL proposes that third-party employers, such as in-home care staffing agencies, could not claim the companionship exemption or the overtime exemption for live-in domestic workers, even if the employee is jointly employed by the third party and the family or household.

The proposal is a continuation of the DOL’s aggressive targeting of the entire home healthcare industry. For example, Aspen Nursing Home, Inc. (“ Aspen ”) provides home health aides who care for persons with developmental and physical disabilities. After a two-year investigation, the DOL concluded Aspen violated the FLSA by paying its employees a flat rate per day regardless of the number of hours they worked. The DOL also concluded Aspen failed to keep accurate records of employees’ work hours. As a result of these FLSA violations, the U.S. District Court ordered Aspen to pay $178,162 in back wages and $138,838 in liquidated damages.

In order to remain compliant with the FLSA, employers should examine their pay practices carefully. Absent an exemption, employees must receive at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses, and incentive pay, for hours worked beyond 40 per week. Further, employers are required to maintain accurate time and payroll records. Although the FLSA requirements may seem like a heavy burden to endure, strict compliance with the Act actually saves money in unnecessary DOL investigations and litigation costs.

This article does not constitute legal advice. For advice regarding a particular situation, please contact a qualified lawyer of your choosing.