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Companionship Exemption Preserved, For Now

Labor & Employment Alert
January 2, 2015

Hours before the scheduled January 1, 2015, effective date, the U.S. District Court for the District of Columbia temporarily stayed a provision of the U.S. Department of Labor's Final Rule that would have significantly restricted eligibility for the companionship exemption by substantially narrowing the definition of "companionship services." The court’s stay, coupled with the previously reported vacatur of the third-party provider rules, preserves the status quo with the federal companionship exemption until January 15, 2015.  

As previously reported, in October 2013, the Department of Labor promulgated a Final Rule that made a number of changes to the companionship exemption under the Fair Labor Standards Act.  On December 22, 2014, the D.C. District Court, in Home Care Association of America v. Weil, struck down the third-party provider provisions of the Final Rule.  The Weil decision, however, left intact the Final Rule’s significantly narrowed definition of “companionship services.” Had this new definition gone into effect on January 1, 2015, as originally scheduled, home care agencies would have been required to pay home care aides overtime at time-and-one-half their regular rate of pay if they spent more than 20 percent of their time providing "care-"related services or if they performed any general household work. To prevent this from happening, the Home Care Association of America sought to stay the effective date of the narrowed definition of "companionship services," pending a final decision on whether such definition was lawful. By order dated December 31, 2014, the court granted the stay until January 15, 2015.

On January 9, 2015, the court will hold a hearing to decide whether to continue the stay. If the stay is continued, the federal companionship exemption will be available to home care providers as it was prior to January 1, 2015. Stay tuned.