In a Law360 article, I provided insight on the Department of Labor’s (DOL) proposed regulations on retirement plans that would make it easier for companies to join existing retirement plans or join forces to generate new ones – which has the potential to broaden the availability of workplace retirement plans to allowing small businesses. Under the proposed regulations, “a group of unrelated employers could now have a single ERISA plan,” I explained.
Bass, Berry & Sims attorney Tim Garrett provided insight on the impact that hospitals may encounter as a result of the Department of Labor’s (DOL) new overtime pay rule, set to take effect December 1, 2016. The new rule will more than double the salary level for those employees classified as exempt from overtime pay from the current level of $23,660 to the new level of $47,476, or $913 per week. As Tim points out, “[a] major challenge for hospitals will be cost containment.” The new rule could make it difficult for hospitals to anticipate the new labor costs.
The full article, “New Overtime Rules Could Upend Pay Structures,” was published by Hospitals & Health Networks on October 25, 2016, and is available online.
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:
- 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.
- 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.