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We Count on Home Care

We Count on Home Care

Domestic Service Final Rule Frequently Asked Questions (FAQs)

The Fair Labor Standards Act (FLSA) was enacted in 1938 to provide minimum wage and overtime protections for workers, to prevent unfair competition among businesses based on subminimum wages, and to spread employment by requiring employers whose employees work excessive hours to compensate employees at one-and-one-half times the regular rate of pay for all hours worked over 40.

The FLSA did not initially protect workers employed directly by households in domestic service, such as cooks, housekeepers, maids, and gardeners. Congress explicitly extended FLSA coverage to "domestic service" workers in 1974, amending the Act to apply to employees performing household services in a private home. While Congress expanded protections to "domestic service" workers, the 1974 amendments also exempted certain domestic service workers from the FLSA's minimum wage and overtime provisions. Under this exemption, casual babysitters and domestic service workers employed to provide "companionship services" to elderly persons or persons with illnesses, injuries, or disabilities) are not required to be paid the minimum wage or overtime pay. Congress also created an exemption only from the overtime pay requirement for live-in domestic service workers.

The Department recently revised its regulations defining companionship services so that many direct care workers, such as certified nursing assistants, home health aides, personal care aides, and other caregivers are protected by the FLSA. The Department also revised the regulations concerning live-in domestic service workers. The new regulations are effective January 1, 2015. These FAQs are intended to help workers, families and employers better understand the new regulations.



General




Q. How long has it been since the Department last revised the "domestic service" regulations?

A. No major revisions have been made to the domestic service regulations in 38 years.

The Fair Labor Standards Act (FLSA or Act) was passed in 1938 to provide minimum wage and overtime protections for workers, to prevent unfair competition among businesses based on subminimum wages, and to spread employment by requiring employers whose employees work excessive hours to compensate employees at one-and-one-half times the regular rate of pay for all hours worked over 40.

The FLSA did not initially protect workers employed directly by households in domestic service, such as cooks, housekeepers, maids, and gardeners. However, the FLSA's minimum wage and overtime compensation provisions did extend to domestic service workers employed by enterprises covered by the Act, such as gardeners employed by covered landscaping companies or a cook employed by a covered caterer, even if their work was in or about a private household.

Congress explicitly extended FLSA coverage to "domestic service" workers in 1974, amending the Act to apply to employees performing household services in a private home, including those domestic service workers employed directly by households or by companies too small to be covered as enterprises under the Act.

While Congress expanded protections to "domestic service" workers, the 1974 amendments also exempted certain domestic service workers from the FLSA's minimum wage and overtime provisions. Under this exemption, casual babysitters and domestic service workers employed to provide "companionship services" to elderly persons or persons with illnesses, injuries, or disabilities) are not required to be paid the minimum wage or overtime pay. Congress also created an exemption only from the overtime pay requirement for live-in domestic service workers.

The Department issued final regulations in 1975 implementing these exemptions. No major revisions have been made to the domestic service regulations in 38 years.

Q. Why did the Department change the "domestic service" regulations?

A. Although the regulations governing these exemptions have been substantially unchanged since they were promulgated in 1975, the home care industry has undergone a dramatic transformation in the past several decades. As more individuals choose to receive services at home rather than in nursing homes or other institutions, workers who provide home care services perform increasingly skilled duties. Referred to as "direct care workers" in the Final Rule, these workers are employed under titles including certified nursing assistants, home health aides, personal care aides, and caregivers. Today, direct care workers are, for the most part, not the elder sitters that Congress envisioned when it enacted the companionship services exemption in 1974, but are instead professional caregivers.

There has been a growing demand for long-term home care for persons of all ages, and as a result the home care industry has grown dramatically. Despite this industry's growth and the fact that many direct care workers perform increasingly skilled work previously done by trained personnel, direct care workers remain among the lowest paid in the service industry, impeding efforts to improve both jobs and care.

Many direct care workers employed by individuals and third parties have been excluded from the minimum wage and overtime protections of the FLSA under the current companionship services exemption, which courts have read broadly to encompass essentially all workers providing services in the home to elderly people or people with illnesses, injuries, or disabilities regardless of the skill required to provide the care. This broad application of the exemption harms direct care workers, who depend on wages for their livelihood and that of their families, as well as the individuals receiving services and their families, who depend on a professional, trained workforce to provide high-quality services and continuity of care. In view of these changes, the Department has revised its regulations concerning domestic service workers in large part to narrow the companionship services exemption to apply only to the types of workers Congress intended to fall outside the scope of the FLSA. For more information see Fact Sheet: Application of the Fair Labor Standards Act to Domestic Service; Final Rule.

Q. What are the significant changes to the "domestic service" regulations?

A. The Department's Final Rule makes two significant changes: (1) the tasks that comprise exempt "companionship services" are more narrowly defined; and (2) the exemptions for companionship services and live-in domestic service employees may only be claimed by the individual, family, or household using the services rather than third party employers such as home health care agencies. The Final Rule also revises the recordkeeping requirements for employers of live-in domestic service employees. See Fact Sheet: Application of the Fair Labor Standards Act to Domestic Service; Final Rule.

Q. Can individuals, families, and/or households who employ a domestic service worker directly claim the companionship services and live-in domestic service worker exemptions under the Final Rule?

A. Under the Final Rule, an individual, family, or household who employs a worker providing companionship services to an elderly person or person with illness, injury, or disability may claim the companionship services exemption from the Act's minimum wage and overtime pay provisions if the employee meets the "duties test." Similarly, an individual, family, or household who employs a worker who resides on the employer's premises to provide domestic service may claim the live-in domestic service employee overtime pay exemption under the Final Rule if the employee meets the residency requirements. See Fact Sheet: Application of the Fair Labor Standards Act to Domestic Service; Final Rule for additional information.

Q. Can third party employers, such as home care or staffing agencies, claim the companionship services and live-in domestic service worker exemptions under the Final Rule?

A. No, third party employers are not entitled to claim either the companionship services or live-in domestic service employee exemptions under this Final Rule. Individuals or members of a family or household using the services, however, may claim the minimum wage and overtime exemption for companionship services under the Final Rule as long as the employee meets the "duties test." Similarly, individuals, families, or households, may claim the live-in domestic service employee exemption under the Final Rule as long as the employee meets the residency requirements. This means that an individual consumer, family, or household who may properly claim the companionship services or live-in domestic service employee exemptions will not be liable for minimum wage or overtime pay obligations related to those exemptions, regardless of whether the consumer employs the worker solely or jointly with a third party.

Q. What FLSA policies were not changed as part of this rulemaking?

A. The Final Rule makes no changes to the Department's longstanding regulations concerning:

  • What constitutes a "private home," which is the type of residence in which "domestic service" occurs (see Fact Sheet #79: Private Home and Domestic Service Employment Under the Fair Labor Standards Act (FLSA));
  • Whether an employment relationship exists (see Fact Sheet #13 Employment Relationship Under the Fair Labor Standards Act (FLSA));
  • Whether an employee is jointly employed by two or more employers (see #79E: Joint Employment in Domestic Employment Under the Fair Labor Standards Act (FLSA)); and
  • What constitutes compensable "hours worked" (see Fact Sheet #79D: Hours Worked Applicable to Domestic Service under the Fair Labor Standards Act (FLSA)).

Q. What does it mean to be an employer under the Fair Labor Standards Act?

A. The FLSA defines "employer" as "any person acting directly or indirectly in the interest of an employer in relation to an employee" The FLSA further defines an "employee" as "any individual employed by an employer," and "employ" as "includes to suffer or permit to work." The definition is necessarily a broad one, in accordance with the remedial purpose of the FLSA. See Fact Sheet # 13: Employment Relationship Under the Fair Labor Standards Act (FLSA) for more information. An individual, family, or household receiving services provided by a direct care worker typically acts as an "employer" of the direct care worker under the FLSA. A single individual may be considered an employee of more than one employer under the FLSA. For example, an agency that sends a direct care worker to an individual's home may be a joint employer with the individual, family or household to whom the direct care worker provides services. For more information about "joint employment," see Fact Sheet #79E: Joint Employment in Domestic Employment Under the Fair Labor Standards Act.

Q. Does the FLSA apply to home care workers who are independent contractors?

A. The FLSA defines "employer" and "employee" broadly. But workers who are independent contractors, meaning they are in business for themselves rather than economically dependent on an employer, are not employees and do not have to be paid according to the requirements of the Act. To determine whether the worker is an independent contractor or an employee, factors to consider include:

1) The extent to which the services rendered are an integral part of the principal's business.
2) The permanency of the relationship.
3) The amount of the alleged contractor's investment in facilities and equipment.
4) The nature and degree of control by the principal.
5) The alleged contractor's opportunities for profit and loss.
6) The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
7) The degree of independent business organization.

Most home care workers will be employees, and not independent contractors, of the individual who receives services (or the individual's family, household, or other representative) and/or a third party agency that arranges the home care.

Q. Does the FLSA apply to respite or relief workers who fill in for home care workers?

A. An analysis must be conducted to determine whether any worker in the home who provides services when the usual care provider is unable to do so (usually called a respite or relief worker) is an employee for purposes of the FLSA. As described in the previous question, whether any particular worker is an employee or independent contractor for purposes of the FLSA depends on the economic realities test, which considers whether the worker is economically dependent on the potential employer or is instead in business for herself.

Depending on the particular circumstances, a respite worker could be an employee either of the home care provider or of a public or private agency that arranges the respite care. In most cases, a provider or agency will control the worker's services (such as by setting the worker's schedule and directing the worker as to the tasks to be performed), the worker will have no opportunity for profit or loss but will instead receive wages, the worker will not have invested in the relationship, and the worker will provide services that are integral to the business of the potential employer. Based on those facts, the economic realities test will most often lead to the conclusion that respite workers are employees who are likely entitled to FLSA minimum wage and overtime protections.

Q. What if an individual's family member is his/her paid care provider?

A. The Department recognizes the significance and unique nature of paid family and household caregiving in certain Medicaid-funded and certain other publicly funded programs. Although a paid family care provider can be an employee under the FLSA, the Department has determined that the FLSA does not necessarily require that once a family or household member is paid to provide some home care services, all care provided by that family or household member is part of the employment relationship. In such programs, the Department will usually not consider a family or household member with a pre-existing close, personal relationship with the consumer to be employed beyond a written agreement developed with the involvement and approval of the program and the consumer (or the consumer's representative), usually called a plan of care. The plan of care will define the employment relationship if it is "reasonable," and the determination of whether such an agreement is reasonable means that it treats a family or household member selected as a paid care provider in the same way it would a paid care provider who is not a relative or household member of the consumer. This determination includes consideration of whether the plan of care would have included the same number of paid hours if the care provider had not been a family or household member of the consumer. See Fact Sheet #79F: Paid Family or Household Members in Certain Medicaid-Funded and Certain Other Publicly Funded Programs Offering Home Care Services Under the Fair Labor Standards Act (FLSA).

newQ. What is the significance of an electronic visit verification (EVV) system, used to monitor the arrival and departure of home care workers to and from the home of a recipient of services, on an analysis of joint employment?

The existence of an EVV system is one of many factors that may be relevant to whether a particular entity is an employer of a home care worker. As with all relevant factors, this fact alone is not determinative, but must be considered as part of the complete economic realities analysis, as to which there is no precise formula. (Please see our guidance regarding joint employment by public entities in consumer-directed programs, available at http://www.dol.gov/whd/homecare/joint_employment.htm, for more information about this test and joint employment generally.)

As with any other factor, whether an EVV system is a strong, moderate, or weak indicator of joint employer status depends upon the circumstances. If a state or other public entity runs an EVV system, is the recipient of the information collected, uses that information to track and pay for the work time of home care providers, and the consumer does not verify or approve provider time sheets, that would be a strong indicator of employer status of the state or public entity. If a state or other public entity runs an EVV system but uses the information collected solely as a quality control mechanism (e.g., to ensure that a consumer is receiving the amount of care accounted for in the consumer's plan of care, or to ensure that a consumer is not left unattended inappropriately), and the consumer still retains the ultimate responsibility for verifying or approving provider timesheets, that would be a moderate indicator of employer status of the state or public entity. If an EVV system is run by a fiscal intermediary or other private agency and a state or public entity does not have access to the information collected, or there is no EVV system in place at all, that would be a weak indicator of employer status of the state or public entity. Whether any fiscal intermediary or other private agency is a joint employer for purposes of the Fair Labor Standards Act (possibly along with the state or public entity as well as with a consumer) requires a separate analysis of the economic realities test as to that potential employer; for any entity, the facts regarding an EVV system would be one, non-determinative factor to consider when conducting the analysis.



Companionship services




Q. What is the companionship services exemption?

A. Congress explicitly extended FLSA coverage to "domestic service" workers in 1974, amending the Act to apply to employees performing household services in a private home, including those domestic service workers employed directly by households or by companies too small to be covered as enterprises the Act. While Congress expanded protections to "domestic service" workers, the 1974 amendments also created a limited exemption from both the minimum wage and overtime pay requirements of the Act for domestic service workers employed to provide "companionship services" for elderly people or people with illnesses, injuries or disabilities who require assistance in caring for themselves. The statute authorizes the Department of Labor to define the term "companionship services." The Final Rule defines "companionship services" as the provision of fellowship and protection and explains that "companionship services" may also include the provision of care if the care is provided attendant to and in conjunction with the provision of fellowship and protection and does not exceed 20 percent of the total hours worked per person and per workweek.

Q. What are tasks that constitute fellowship and protection?

A. "Fellowship" means to engage the person receiving services in social, physical, and mental activities. "Protection" means to be present with the person receiving services in his or her home or to accompany the person when outside of the home to monitor the person's safety and well-being. Examples of fellowship and protection may include: conversation; reading; games; crafts; and accompanying the person on walks, on errands, to appointments, or to social events.

Q. Do other activities or services qualify as companionship services?

A. "Companionship services" also includes the provision of care services under the following conditions:

  • The care is provided attendant to and in conjunction with the provision of fellowship and protection;
  • The care is limited to assistance with activities of daily living (ADLs) (such as dressing, grooming, feeding, bathing, toileting, and transferring) and instrumental activities of daily living (IADLs), which are tasks that enable a person to live independently at home (such as meal preparation, driving, light housework, managing finances, assistance with the physical taking of medications, and arranging medical care); and
  • The time the domestic service worker spends providing care to the person is no more than 20 percent of his or her hours worked for the person during the workweek.

For example, Sue, a direct care worker employed solely by Ms. Jones, regularly works 35 hours per week in Ms. Jones' home. Sue primarily provides fellowship and protection to Ms. Jones. If she also spends no more than 7 hours per week (20% of her work time for Ms. Jones) providing assistance to Ms. Jones with ADLs and IADLs, she is providing care within the scope of the definition of companionship services, and Ms. Jones is not required to pay her minimum wage and overtime compensation.

Q. Must driving always be counted in the 20 percent allowance for care services?

No. Driving usually constitutes assistance with IADLs and is part of the 20 percent allowance for care services. But because fellowship and protection can include accompanying the person outside of the home, driving may, in limited circumstances, be part of those services. The distinction between driving that is part of fellowship and protection and driving that constitutes assistance with IADLs depends upon the purpose and context of the trip. For example: Henry is hired as a personal attendant for Mr. Clark, an elderly person who requires assistance with meal preparation, driving, and light housework. Henry's duties include driving Mr. Clark to medical appointments. The time he spends at that task would count toward the 20 percent limitation on care. But if Henry takes Mr. Clark on an outing such as taking a scenic drive to see fall foliage or driving to go out to lunch together, Henry would be providing fellowship and protection, and that time would not count toward the 20 percent limitation on care.

Q. What happens if the worker spends more than 20 percent of his or her time in a week assisting the person with ADLs and IADLs?

A. If a worker providing services in a private home spends more than 20% of his or her workweek providing assistance to the person with ADLs and IADLs, then he or she is not performing companionship services during that week. In such cases, the worker must be paid at least the Federal minimum wage for all hours worked and overtime at one and a half his or her regular rate of pay for hours worked over 40 in the workweek.

Q. Does "companionship services" include activities such as making dinner for the entire household or washing the laundry for everyone in the household?

A. No, companionship services must be provided primarily for the benefit of the elderly person or person with an illness, injury, or disability who requires assistance in caring for himself or herself rather than for other members of that person's household. However, the Department recognizes that sometimes assisting the person with IADLs may benefit other household members. For example, if a domestic service worker makes tuna salad for the person's lunch and there is some tuna salad left over after the person has eaten lunch, the fact that another member of the household may eat the leftover tuna salad doesn't change the fact that the tuna salad was prepared primarily for the elderly person or person with an illness, injury, or disability. Similarly, if the domestic service worker dusts a bedroom the person shares with another household member and the dusting was performed primarily for the benefit of the elderly person or person with an illness, injury or disability, performance of that task does not mean the worker is not performing companionship services. If a worker performs general household services unrelated to the care of the person, however, he or she is not performing companionship services and he or she must be paid at least the Federal minimum wage and overtime at one and a half times his or her regular rate of pay for all hours worked over to in the workweek.

Q. Are medically related services considered part of companionship services?

A. No "Companionship services" does not include the performance of medically related services for the person. The determination of whether services are medically related is based on whether the services typically require and are performed by trained personnel, such as registered nurses, licensed practical nurses, or certified nursing assistants; the determination is not based on the actual training or occupational title of the individual performing the services. Medically related tasks may be invasive, sterile, or otherwise require the exercise of medical judgment; examples include but are not limited to catheter care, turning and repositioning, ostomy care, tube feeding, treating bruising or bedsores, and physical therapy. If the worker performs medically related services for the person, then during that workweek he or she must be paid at least the Federal minimum wage for all hours worked and overtime at one and a half his or her regular rate of pay for hours worked over 40 in the workweek.



Live-In Domestic Service Employees




Q. What is a "live-in" domestic service employee?

A. Employees providing domestic services in a private home who reside on the employer's premises are live-in domestic service employees exempt from the overtime requirements of the FLSA. Employees reside on the employer's premises if they work and sleep there on a "permanent basis" or for "extended periods of time." Employees who work and sleep on the employer's premises seven days per week and therefore have no home of their own other than the one provided by the employer under the employment agreement are considered to reside on the employer's premises on a "permanent basis." Employees who work 120 hours or more each week and work and sleep on the employer's premises five days a week reside on the employer's premises for "extended periods of time." Employees who work and sleep on the employer's premises for five consecutive days or nights each week would also qualify as residing on the premises for "extended periods of time" even if they do not work 120 or more hours each week. Employees who work for only a short period of time for the household are not considered live-in domestic service workers, because residing on the premises implies more than temporary activity. Employees who work 24-hour shifts but are not residing on the employer's premises "permanently" or for "extended periods of time" are not considered live-in domestic service workers, and the employers are not entitled to the overtime pay exemption. Employees who work 24-hour shifts but are not live-ins must be paid at least minimum wage and overtime for all hours worked unless they are otherwise exempt. See Fact Sheet #79B: Live-In Domestic Service Workers Under the Fair Labor Standards Act (FLSA) for more information.

Q. What are employers' obligations to live-in domestic service employees?

A. Domestic service workers who reside in the employer's home and are employed by an individual, family, or household are exempt from the overtime pay requirement, although they must be paid at least the Federal minimum wage for all hours worked. Third party employers, such as home care agencies, may not claim the overtime exemption for live-in domestic service workers, and must pay such workers at least the Federal minimum wage for all hours worked and overtime pay at one and a half times the regular rate of pay for all hours worked over 40 in a workweek. (See Fact Sheet #79E: Joint Employment in Domestic Service Employment Under the Fair Labor Standards Act (FLSA) for information about joint employment.)

Q. Will live-in domestic service workers be entitled to overtime pay under the Final Rule?

A. Live-in domestic service workers who reside in the employer's home and are employed solely by an individual, family, or household are exempt from overtime pay, although they must be paid at least the federal minimum wage for all hours worked. Live-in domestic workers who are employed by a third party must be paid at least the federal minimum wage and overtime pay for all hours worked. Only the third party is responsible for compliance with the FLSA's overtime requirement; if an individual consumer, family, or household may properly claim the live-in domestic service employee exemption, that person will not be liable for overtime pay obligations, regardless of any involvement of a third party.

Q. Does the Final Rule make other changes relevant to live-in domestic service workers?

A. As with all workers covered by the FLSA, employers must maintain an accurate record of hours worked by live-in domestic service workers. Employers and live-in domestic service workers may create an agreement regarding time to be excluded from hours worked, including bona fide meal periods, sleep periods, and other off-duty time. If there is significant deviation from such an agreement, the employer and live-in domestic service worker should reach a new agreement reflecting the actual schedule. Regardless of whether an agreement exists, the employer is required to keep records showing, among other things, the exact number of hours worked by the live-in domestic service worker. While the employer is ultimately responsible for complying with the recordkeeping requirements, an employer may assign a live-in domestic employee the tasks of recording his or her hours worked and submitting those records to the employer. See Fact Sheet #79B: Live-In Domestic Service Workers under the Fair Labor Standards Act (FLSA) for more information.

Q. What are the rules for determining how many hours a live-in domestic service worker has worked and therefore for which she must be paid?

A. A live-in domestic service worker and the employer may make an agreement excluding from hours worked sleep time, meal time, and other periods of freedom from all duties when the worker leaves the premises or stays on the premises for purely personal matters. The live-in domestic service worker must be paid for all hours worked even if those hours deviate from the agreement.

Information about reasonable agreements in the context of shared living arrangements (such as adult foster care and paid roommate situations) is available in guidance documents that can be found at http://www.dol.gov/whd/homecare/shared_living.htm.

Q. How do these rules apply to shared living arrangements?

A. The Department has issued guidance specifically about how the Fair Labor Standards Act, including the new Final Rule, applies to shared living arrangements, including adult foster care and paid roommate situations. The guidance explains how to determine whether the FLSA applies to a given arrangement and if so, how the employer can comply with it, including when an employer may exclude sleep time from paid time and how to calculate wages when an employer properly takes credit for providing an employee's room and board. The guidance is available at http://www.dol.gov/whd/homecare/shared_living.htm.



Home care agencies and other third party employers




Q. What is a third party employer?

A. A worker may be employed by the individual, family, or household for whom the worker provides services and may also be employed by another employer, such as a staffing agency, public agency, or home care agency. When the domestic service employee is employed by an employer other than an individual, family, or household to perform services, that other employer is the third party employer.

Q. Is a fiscal intermediary or employer of record considered a third party employer?

A. It depends Certain entities may provide referral services, perform payroll functions, or process Medicaid reimbursement payments but not act as the employer of a worker. Such entities may be fiscal intermediaries or "employers of record" and are not held liable for payment of minimum wage or overtime pay. Under the Fair Labor Standards Act, determinations about whether an entity has an employment relationship with a worker are made by examining all the facts in a particular case and assessing the economic realities of the work relationship. Factors to consider may include, but are not limited to, the following:

  • whether the entity has the power to direct, control, or supervise the worker(s) or the work performed;
  • whether the entity has the power to hire or fire, modify the employment conditions or determine the pay rates or the methods of wage payment for the worker(s);
  • the degree of permanency and duration of the relationship; where the work is performed and whether the tasks performed require special skills;
  • whether the work performed is an integral part of the overall business operation; whether the entity undertakes responsibilities in relation to the worker(s) which are commonly performed by employers;
  • whose equipment is used; and
  • who performs payroll and similar functions.

Other factors may be considered, and no one factor is controlling. While no one factor is controlling, the entity will likely be considered an employer under the FLSA if the entity has the power to direct or supervise the worker, or the power to hire, fire, or modify the conditions of employment, or determine the pay rate or method of pay.

Example 1:Mary contacts her state government about receiving home care services. The state has a "self-direction program" that allows Mary to hire a direct care worker through an entity that has contracted with the state to serve as the "fiscal/employer agent" for program participants who employ direct care workers. The "fiscal/employer agent" performs tasks similar to those that commercial payroll agents perform for businesses, such as maintaining records, issuing payments, addressing tax withholdings, and ensuring that workers' compensation insurance is maintained for the worker, but is not involved in any way in the daily supervision, scheduling, or direction of the employee. Mary has complete budget authority over how to allocate the funds she receives under the Medicaid self-direction program, negotiates the wage rate with the direct care worker, is wholly responsible for day-to-day duty assignments, and has the sole power to hire and fire her direct care worker. In this scenario, the fiscal/employer agent is likely not an employer of the direct care worker, and Mary is likely the sole employer. The fiscal/employer agent has no power to hire or fire, direct, control, or supervise the worker and cannot modify the pay rate or modify the employment conditions. The work is not performed on the fiscal/employer agent's premises, and the fiscal/employer agent has provided no tools or materials required for the tasks performed. However, any change in the specific facts of this scenario, such as if direct care workers are required to obtain approval from the fiscal/employer agent in order to arrive late or be absent from work or if the fiscal/employer agent sets the direct care workers' specific hours worked, may lead to a different conclusion regarding the employer status of the fiscal/employer agent.

Example 2: Michael contacted his county government about receiving home care services. A county social worker met with Michael and made a determination with respect to Michael's financial eligibility and need for services. The social worker determined the tasks to be performed for Michael and the hours per week required to perform those tasks. The social worker provided Michael with a list of potential workers but after Michael forgot to contact the potential workers several times, the social worker hired the direct care worker himself. While Michael is responsible for the day-to-day supervision of the direct care worker, the social worker intervenes if a problem arises such as arranging for another worker should the primary worker become unavailable. The county is considered to be the employer of record, as it pays the direct care worker directly via check, keeps records of hours worked, and the hourly rate of pay for the worker is determined by the county. Here, the direct care worker's wages are paid by the county and the county controls the rate of pay and the method of payment. The county maintains employment records. The county exercises considerable control over the structure and conditions of employment by determining the number of hours for work and what tasks are to be performed. The county intervenes in issues between the direct care worker and consumer and the county social worker hired the worker. In this instance, the county is likely a joint employer with the consumer.

Q. What are the obligations of third party employers?

A. Third party employers must pay at least the Federal minimum wage and overtime pay to all workers employed to perform domestic service employment, including workers who perform companionship services or are live-in domestic service employees.

Third party employers must pay home care workers for all hours those employees work. Hours worked include time spent traveling between multiple individuals receiving services if the third party employer is an employer as to each individual; for example, if a home care agency assigns a worker to provided services to one of its clients in the mornings and another in the afternoons, the time the worker spends driving from one client's home to the other's must be paid. In addition, a third party employer is responsible for any overtime generated by working for multiple individuals receiving services; for example, if a state administering a Medicaid-funded, consumer-directed program is a joint employer of the care providers hired through the program, a worker who provides 30 hours of services to one Medicaid recipient enrolled in the program and 20 hours of services to another must ensure that the worker receives 10 hours of overtime compensation.

Third party employers must maintain records for each employee working in domestic service employment just as employers are required to maintain records for any other non-exempt employee. See Fact Sheet #79C: Recordkeeping Requirements for Individuals, Families, or Households who Employ Domestic Service Workers Under the Fair Labor Standards Act (FLSA).

Q. What do the changes made by the Final Rule to third party employer's obligations mean for individuals receiving services and their families?

A. Where a worker is performing duties that fit within the definition of companionship services, the individual receiving services (or his or her family or household) may claim the companionship services exemption, but any third party employer of that worker may not. This means that the third party employer is responsible for ensuring that the worker is paid minimum wage and/or overtime compensation in compliance with the Fair Labor Standards Act and the individual, family, or household will not be held responsible for any wages that are not paid.

The same is true of the live-in domestic service employee exemption. No third party employer may claim the exemption, but an individual, family, or household may claim it the worker meets the exemption's residency requirements. In other words, if the exemption is properly claimed, the individual, family, or household will not be held responsible for any overtime compensation the third party employer fails to pay.

Sleep Time




Q. For an overnight shift, does the employee have to be paid when he or she is asleep?

A. It depends.

Less than 24 Hours
Under the FLSA, an employee who is required to be at work for less than 24 hours must be paid even though he or she is permitted to sleep or engage in other personal activities when not busy. All the time is counted as work time that must be paid.

24 Hours or more
If an employee is required to be on duty for 24 hours or more, the employer and employee may agree to not count as hours worked a bona fide regularly scheduled sleeping period of not more than eight hours, provided that (1) adequate sleeping facilities are furnished by the employer, and (2) the employee's time spent sleeping is usually uninterrupted.

There are different rules for employees who live in the household where the services are provided. See the questions and answers regarding rules that apply to live-in domestic service employees.

Q. Can a third party employer enter an agreement with a live-in domestic service employee that excludes sleep time and other off-duty time?

A. Yes, subject to the existing rules about excluding such time. Although third party employers may not claim the live-in domestic service employee exemption from the FLSA's overtime requirement, the other special rules for live-in employees, such as the ability to enter a reasonable agreement setting out what time is hours worked and what is excluded from hours worked, such as sleep time, still apply.

Q. What if there is no agreement between the employer and the employee about how to pay for sleep time for duty periods of 24 hours or more?

A. If there is no express or implied agreement with respect to how an employee will be paid for sleep time, all hours spent on duty, including time spent sleeping, must be counted as work time.

Q. If the employee has been providing domestic service to an individual, family or household for the last year and does not have an agreement about sleep time and the employee no longer qualifies for the companionship services exemption, must the employer now pay for all sleep time?

A. The Department understands that many employers may not have express agreements with their current employees to exclude sleep time from hours worked. The Department believes, however, that sufficient time exists before the Final Rule becomes effective on January 1, 2015 for the employer and employee to enter into an agreement to exclude a scheduled sleeping period of not more than 8 hours from the employee's hours worked. To exclude such time, the employer must provide adequate sleeping facilities and the employee's time spent sleeping must usually be uninterrupted.

Q. If the employee refuses to enter into the agreement to exclude sleep time, may the employer terminate the employment relationship?

A. No. While the employer may not terminate an employee for refusing to enter into an agreement or for ending an agreement, the employer would not be required to agree to a continuation of the same terms and conditions of employment. The employer and employee are free to establish new conditions of employment such as rate of pay, hours of work, or reassignment. For example, if an employee refuses to enter into an agreement regarding the exclusion of sleep time, an employer might decide to assign that employee only to shifts of less than 24 hours.

Q. What if an employee whose sleep time is generally properly excluded is woken up to provide services to a consumer for one hour?

A. Interruptions during which the worker performs tasks on behalf of the consumer must always be paid as work time. In this circumstance, the employee must be paid for the hour her sleep is disturbed.

Q. What if an employee is up multiple times throughout the night or all night providing services to the person?

A. Interruptions during which the worker performs tasks on behalf the person must always be paid as work time. If the interruptions are so frequent that the employee cannot get at least five hours of sleep during the scheduled sleeping period, the entire period must be counted as time spent working and paid accordingly.

Q. If an employee lives in the employer's home, what constitutes compensable hours worked?

A. An employee who resides in the employer's home permanently or for extended periods of time need not be paid for all of the time spent at the home. When a live-in employee engages in normal personal activities such as eating, sleeping, entertaining, and other periods of complete freedom from all duties, he or she does not have to be paid for that time. For a live-in domestic service employee, such as a live-in roommate, the employer and employee may agree to not pay for time spent during bona fide meal periods, sleep periods, and off-duty time. If the meal periods, sleep time, or other periods of free time are interrupted by a call to duty, the interruption must be counted as hours worked. In these circumstances, the Department will accept any reasonable agreement of the parties taking into consideration all of the pertinent facts. However, the employer must track and record all hours worked by domestic service employees, including live-in employees, and the employee must be paid for all hours actually worked notwithstanding the existence of an agreement. The employer may assign the employee the tasks of recording the hours worked and submitting that record to the employer.

Information about reasonable agreements in the context of shared living arrangements (such as adult foster care and paid roommate situations) is available in guidance documents that can be found at http://www.dol.gov/whd/homecare/shared_living.htm.

Q. Does a live-in employee, such as a roommate who is paid to assist an elderly person or person with an illness, injury, or disability in the household, have to be paid for sleep time?

The Department's longstanding rules under the FLSA make clear that live-in employees do not need to be compensated for sleep time if there is an agreement to exclude such time and the employees are not performing work. Information about the proper exclusion of sleep time from paid time in the context of shared living arrangements (such as adult foster care and paid roommate situations) is available in guidance documents that can be found at http://www.dol.gov/whd/homecare/shared_living.htm.

newQ. Under my state law, all sleep time during which a home care worker is required to be in the home must be paid at the state minimum wage or higher. In other words, under state law, all sleeping hours must be included as worked, paid time. But under the federal FLSA, this sleep time can under many circumstances be excluded from hours worked. Must those hours, because they are paid pursuant to state law, be included in a calculation of overtime due pursuant to the FLSA?

A. No. Payment for time not otherwise required to be compensated under the FLSA does not necessarily convert that time into FLSA hours workedi.e., time that must be paid according to FLSA requirements. The Department's regulations provide that whether the time that is not required to be compensated becomes hours worked depends on the intent of the parties. See 29 C.F.R. 778.320. If the employer and employee have an agreement to exclude sleep time from FLSA hours worked, even if the time is paid under state law, that agreement, if reasonable, controls.

In such circumstances, the excluded hours do not count towards total hours worked for purposes of determining whether the FLSA's minimum wage requirement is met or how much overtime compensation is owed pursuant to the FLSA. In addition, the money paid for the excluded time is not to be included in calculating the employee's regular hourly rate for FLSA purposes, nor may it be counted toward meeting any FLSA overtime obligation the employer has.

For example, assume a home care worker works 50 hours per week during daytime shifts and 32 hours per week on overnight shifts (four, eight-hour overnight shifts, for example), during which she gets uninterrupted sleep and otherwise meets the requirements for the exclusion of sleep time under the FLSA (the sleep time rules apply to a live-in worker or one who works shifts of 24 hours or more.) She is paid $12 per hour for daytime work and $10 per hour for the overnight time. She would be owed 10 hours of overtime compensation (50 non-excludable hours minus 40 hours for which no overtime must be paid). Because her regular rate of pay for FLSA hours worked is $12, her overtime compensation due is $60 ($12 x .5 x 10). The $320 she receives for the 32 overnight hours may not be counted toward the $60 obligation, so she should receive $980 ($600 regular pay for daytime hours + $60 overtime compensation + $320 pay for sleep time) each week.



Travel Time




Q. Must an employer pay for the employee's drive or travel time from home to the residence of the individual receiving services?

A. No. Under the FLSA, normal home-to-work travel does not need to be paid regardless of whether the employee works at a fixed location or at different job sites. If a direct care worker travels to the first work site directly from home, and returns directly home from the final work site, this commuting travel time generally does not need to be paid.

Q. If an employee provides services to multiple individuals during the workday and must travel between these worksites, does that travel time count as work time that must be paid?

A. Yes. Under the FLSA, employees who travel to more than one worksite for an employer during the workday must be paid for travel time between each worksite. If an employee works for two different employers, he or she does not need to be compensated for time spent traveling between the two employers' worksites.

Q. How is the travel time counted if an employee does not travel directly between the homes of two individuals receiving services?

Workers who travel to more than one worksite for an employer during the workday must be paid for travel time between each worksite; if the travel is not direct because the employee is relieved from duty long enough to engage in purely personal pursuits, only the time necessary to make the trip must be paid.

For example, Tiffany is a direct care worker who is employed by Handy Home Care Agency. She provides services to two of the agency's clients, Mr. Jackson, from 9:00am to 11:30am, and Mr. Smith, from 2:00pm to 6:00pm. Tiffany drives to the two different worksites which are 30 minutes apart. She leaves Mr. Jackson's home at 11:30am and goes to a restaurant for lunch, shops for herself, and then arrives at Mr. Smith's home at 2:00pm.

Because Tiffany is completely relieved from duty long enough to use the time effectively for her own purposes (i.e., lunch and shopping) not all of the time is hours worked. The 30 minutes required to travel between the two homes is hours worked and, as of January 1, 2015, must be paid by the Handy Home Care Agency even though Tiffany did not travel directly between consumers.

Q. If an employee provides assistance to an elderly person or person with an illness, injury or disability by driving or accompanying him or her to an errand or appointment, must that time be paid?

A. Yes. Under the FLSA, travel that is "all in the day's work" must be compensated. For example, if a domestic service employee drives an elderly person or person with an illness, injury or disability to a doctor's appointment or to the grocery store, that time is "all in the day's work" and must be compensated.

Q. If an employee travels to another city with an elderly person or person with an illness, injury or disability, must all the time spent traveling be paid?

A. The Department considers all travel that keeps an employee away from home overnight to be a special class of travel away from home. Travel away from home is work time to the extent that the travel cuts across the employee's workday. The travel is simply a substitute for the employee's other duties. A direct care worker who accompanies an elderly person or person with an illness, injury or disability on travel away from home must be paid for all time spent traveling during the employee's normal work hours. On the other hand, as an enforcement policy, the Department will not consider as work time that time spent in travel away from home outside of regular working hours as a passenger on an airplane, train, boat, bus, or automobile. However, an employee traveling as a passenger with an elderly person or person with an illness, injury or disability as an assistant or helper and "on duty" during the flight is working even though traveling outside of the employee's regular work hours.

Q. If an employee travels on a plane with an elderly person or person with an illness, injury or disability outside of the employee's normal work day and is required to assist the person only during the beginning and end of the flight and is otherwise able to spend the flight time for his or her own purposes, such as reading a magazine, taking a nap or watching a movie, must the entire flight time be paid?

A. Any work which an employee performs while traveling must be counted as hours worked. However, it is clear that not all time spent while away on travel is hours worked and there may be significant periods of time that a direct care worker is not working and is not "engaged to wait" and thus need not be compensated. For example, periods when the employee is completely relieved from duty and which are long enough to enable the employee to use the time effectively for his or her own purposes, such as reading a magazine, taking a nap or watching a movie, are not considered work time that must be paid.

FLSA Compliance




Q. May a home care provider be paid a daily or shift rate?

A. A home care provider entitled to the protections of the Fair Labor Standards Act can be paid an hourly rate, daily rate, shift rate, monthly stipend, or on a salary basis as long as the employee is paid at least the current Federal minimum wage for all hours worked and, if applicable, the overtime premium for any hours worked in excess of 40 in a workweek. For example, a worker who earns $50 per day and works 5 hours on Day 1 and six hours one Day 2 has received $10 per hour on Day 1 and $8.33 per hour on Day 2; both rates are in compliance with the current Federal minimum wage of $7.25 per hour.

Q. Is overtime compensation required if a care provider works more than 40 hours in a week but for two different individuals?

A. A nonexempt employee must be paid overtime if she works more than 40 hours in a workweek for any single employer. So if a home care provider works for a single agency, all of her work time arranged by that agency counts; for example, if she works for Consumer A for 20 hours and Consumer B for 25 hours, she is owed 5 hours of overtime compensation. If, however, her work for Consumer A is arranged by one private agency and her work for Consumer B is arranged by another, separate agency, she is not owed overtime compensation by either of her two agency employers.

Q. Can a home care provider be paid different hourly rates for different work? If the employee is owed overtime, how is it calculated?

A. Under the FLSA, an employer may pay different rates for different types of work so long as the pay rates exceed the minimum wage and the employer pays any overtime obligation under the FLSA.

For example, assume an employee of a home care agency is paid $10.00 per hour for time spent providing care and $8.00 per hour for travel time. Each day for five days, the worker spends four hours providing services to the Consumer A, one hour traveling to Consumer B's home, and five hours providing services to Consumer B. The worker has worked 50 hours during the work week and must be paid the regular rate for all hours worked and the overtime premium for the 10 hours over 40 (9 of which the employee spent providing care and 1 of which the employee spent traveling). The overtime obligation may be calculated in either of two ways: (1) based on the blended regular rate as determined by taking the total remuneration for the workweek and dividing it by the total hours worked in that week, or (2) based on the rate for the particular task(s) performed during the hours over 40 in the workweek.

The math for option (1) is as follows:

$10.00 x 45 hours + $8.00 x 5 hours = $490.00 of straight time pay
$490.00 50 total hours = $9.80 is the regular rate
$9.80 x .5 x 10 hours over 40 = $49.00 in overtime compensation
$490.00 + $49.00 = $539.00 is the total amount due

The math for option (2) is as follows:

$10.00 x 45 hours + $8.00 x 5 hours = $490.00 of straight time pay
$10.00 x 9 hours x .5 = $45.00 in overtime compensation for hours of care services over 40 total hours in the workweek
$8.00 x 1 hour x .5 = $4.00 in overtime compensation for hours of travel time over 40 total hours in the workweek
$45.00 + $4.00 = $49 total overtime compensation due
$490.00 + $49.00 = $539.00 is the total amount due

Q. If a worker is employed at a private home that is inaccessible by public transportation and not close to stores, etc. so that the worker cannot leave the home during the day for his/her own purposes, (e.g., to run errands or shop), must all of the worker's work day be compensated?

A. The FLSA does not require employees to have personal time to run errands, shop, etc. In many cases, employees are granted a meal break of at least 30 minutes. If the 30 or more minutes is free and clear of duties, it is not compensable time, even in situations where the worker is not able to leave the employer's premises. If the time is interrupted, then it is compensable.

Q. If a home care provider is in a home while an individual receiving services is napping and is required to be available whenever the individual wakes up, is this time considered hours worked even if the provider spends the time watching television or reading a book?

Yes. Hours worked (i.e., the time that must be paid under the FLSA) includes time when the worker is being engaged to wait.

newQ. Some home care workers who live with the consumer they serve do not pay rent. Their housing is often funded using the consumer's Section 8 voucher. Can a private agency employer credit the value of the housing towards the total wages considered received by the home care worker?

A. Yes, provided certain requirements are met. Under section 3(m) of the FLSA, an employer may take credit toward wages for the reasonable cost or fair value of lodging provided to an employee under certain circumstances. This credit is addressed in the Department's guidance regarding the application of the FLSA to shared living arrangements, available at http://www.dol.gov/whd/homecare/shared_living.htm, and will be described in more detail in an additional forthcoming guidance document. Note thatas explained in detail in the shared living guidanceit is a credit toward the minimum wage obligation; it does not count toward any overtime obligation.

In a situation in which there is joint employment, for example between a private (for-profit or non-profit) agency and a consumer, the credit applies regardless of which employer pays for the housing. Therefore, as long as the consumer's funds (whether private or received through public assistance), rather than the worker's, are used to pay for the worker's housing, the credit may be applicable even if the cash wages are paid by the agency.

Note that the credit may not exceed the actual cost to the employer of the housing, even if that cost is below market value, and that it must be calculated as a reasonable portion of the total cost of the lodging (e.g., one half of the rent of an apartment the consumer and worker share equally, or less than one half if the worker has a smaller private living space and/or less access to common areas).

Although agencies might not typically consider themselves to jointly employ home care workers along with consumers, for purposes of the FLSA, consumers will often be joint employers of the workers who provide them assistance. In the home care context, given the nature of the work, the consumer for whom services are performed (or the consumer's family or household, including a guardian) is very often a joint employer of the worker. Among other possible indications of employment status, if a consumer (or the consumer's family or household) exercises control over the staff person's work, such as by making decisions about who to hire, whether to fire, what the worker's schedule will be, what tasks the worker will perform and when, or how the worker will perform those tasks, the consumer is likely an employer under the FLSA test.