Dept. of Labor Delays FLSA Enforcement and Penalties Against Home Healthcare Companies

             Employers in the home healthcare industry will be getting a brief delay in the enforcement of new regulations extending minimum wage and overtime requirements to home healthcare workers under the Fair Labor Standards Act (“FLSA”). 

The U.S. Department of Labor’s (“DOL”) final rule is scheduled to take effect January 1, 2015, but on October 7, 2014, the DOL announced it would delay enforcement and the imposition of penalties for a period of six months, or until June 30, 2015.  For the following six months, or until December 31, 2015, the DOL will exercise its discretion in determining whether to bring enforcement actions, based on the extent to which employers have made “good faith efforts to bring their home care programs into FLSA compliance.”

 It is important for employers to remember that despite the DOL's enforcement delay, they are still required to begin complying with the new rule as of January 1, 2015.

            Up until the new rule, the FLSA contained an exemption that employees providing “companionship services” to elderly persons or individuals with illnesses, injuries, or disabilities were not required to be paid the minimum wage or overtime pay if they met certain regulatory requirements.

            This change will result in nearly two million direct care workers, such as home health aides, personal care aides and certified nursing assistants falling under the requirements of the FLSA.  Business groups and Congressional Republicans had strongly pushed for a complete suspension of the new rule, expressing fears that it would make home healthcare unaffordable and result in disruption to patient care.  In explaining its reason for the additional delay in active implementation, the DOL noted:

When we announced the final rule, we provided a 15-month implementation period before its effective date. We did so out of recognition that home care services financing is complex, and that making adjustments to operations, programs and budgets in order to comply with the rule would take time. Some states, tell us that they’re ready to implement the rule. Others, because of budget and legislative processes, have requested an extension.  After careful consideration, the department decided to adopt a time-limited non-enforcement policy. This approach will best serve the goals of rewarding hard work with a fair wage while not disrupting innovative direct care services.

            For employers seeking more detailed information on the changes to the FLSA under the final rule, the DOL is providing an on-line fact sheet.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLP, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com