In a move that could significantly increase employer costs in the home care market, the Department of Labor has published proposed rules that will severely limit the current minimum wage and overtime exemptions for those who provide “companionship services.”

The proposed rules basically do two things:

1. The rules narrow the definition of “companionship services. The Fair Labor Standards Act includes a specific exemption from minimum wage and overtime requirements for employees who “are employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves.” 29 U.S.C. § 213(a)(15).  Currently, the DOL regulations define “companionship services” to include “fellowship, care, and protection for a person who, because of advanced age or physical or mental infirmity, cannot care for his or her own needs.” The regulations also provide that “such services may include household work related to the care of the aged or infirm person such as meal preparation, bed making, washing of clothes, and other similar services.” Such services may also include the performance of general household work provided that such services do not exceed 20 percent of the total hours worked each week.  See 29 CFR § 552.6.The proposed regulations remove from the definition of companionship services the provision of “care”  for the elderly and limit the services to “fellowship” and “protection”.  “Fellowship” is defined as “social, physical, and mental activities” such as “conversation, reading, [and] games” and protection is described as being present with the person in their home or accompanying the elderly person outside the home to “monitor” their “safety and well-being”. “Intimate personal care services” may be provided as long as such services do not exceed 20 percent of the work performed.  “Companionship services” no longer includes any general household work unless such service happens to be incidental to the “fellowship” and “protection” being provided.
2. The new rules prohibit third party employers from claiming the exemption. Not only is the scope of “companionship services” to be greatly limited but the exemption is now only available to the elderly person or their family.  Third party employers of employees who provide companionship services, even if such services meet the new limited definition, will not be able to take advantage of the exemption from the minimum wage and overtime requirements.