For over thirty years home healthcare workers have been exempt from overtime and minimum wage requirements under the Fair Labor Standards Act's ("FLSA") companionship exemption. This week the U.S. Department of Labor ("DOL") announced that it plans to create new regulations that will extend federal overtime and wage protections to roughly two-million home healthcare workers. Although most home healthcare workers earn at least minimum wage, many do not receive overtime compensation, including compensation for the time they spend traveling between patients' homes. Some states, such as Maine, Massachusetts, New York, New Jersey, Pennsylvania, and Maryland, already provide home healthcare workers with minimum wage and overtime protections under state wage and hour laws. Thus, the impact in those states will likely be less than in the vast majority of other states that do not have similar state wage and hour requirements.
Still, under the DOL's proposed regulations, third-party employers - namely any agency that provides in-home care through its own employees - could not claim the companionship exemption, even if the employee is jointly employed by the agency and a private family or household. Additionally, the DOL's proposal would, among other things:
- Restrict the incidental duties of an exempt companion;
- Clarify the parameters of "companionship services" that would and would not be exempt; and
- Revise certain recordkeeping requirements for live-in domestic workers.
With this change, healthcare experts, including our own Brett Witham, have suggested that it could have a big impact on how home healthcare is delivered:
I think this is an example of how good intentions may lead to unintended consequences when people may not understand how this service is delivered in many cases. Probably the biggest impact will be on families who are paying out of pocket for a home healthcare agency worker to spend time with their elderly parent or loved one. Often these home health aides will stay 24 hours at the home, but only a portion of that time is spent actually performing care-type services. Home health aides spend the balance of their time acting as a companion and many will sleep overnight at the patient's home. Depending on how the DOL delineates between home healthcare "work" and "companionship work", it might result in an overall increase in cost to families. Many agencies pay their workers a 'day rate' for this type of 24/7 service, and many families can barely afford it. Any increase in cost could mean that, in many cases, the family or individual simply cannot afford the service. This in turn may result in earlier admission into a facility, and it could also mean that an individual or family exhausts their personal funds sooner, which would likely result in higher Medicaid costs."
Of course, the devil's in the details and the true impact of the DOL's proposed changes are not yet known. Whatever the impact, the home healthcare industry will certainly change and employers in that industry need to be aware that big changes are coming their way. For more information please contact Brett Witham or Matt Bahl.