Home Care Workers: Delayed Enforcement of Wage, Overtime Rules

clock-611619_1280The Department of Labor’s Wage and Hour Division recently announced that it will delay enforcement of certain rules pertaining to home care workers.  These “direct care workers” provide home care services and include certified nursing assistants, home health aides, personal care aides, caregivers and companions.

For six months, the Department of Labor (DOL) will not bring enforcement actions against employers for violations of obligations resulting from amended regulations announced released last year.

Basic Rules

If you are a home care agency or other third-party employer, effective January 1, 2015 you are required to pay at least the federal minimum wage and overtime pay to any direct care worker you jointly or solely employ, regardless of the workers’ duties.

Also effective January 1, 2015, agencies and other third-party employers may no longer claim the overtime pay exemption for live-in domestic service workers.

This Final Rule (78 FR 60454) was announced in October of 2013.  It also contained other provisions that include changing the definition of “companionship services” and requiring accurate time records for live-in workers.

Minimum Wage

The federal minimum wage is currently $7.25 an hour, though many states have their own minimum wage laws.  When a worker is protected by both state and federal minimum wage laws, the worker is entitled to the higher minimum wage.

In many areas, the minimum wage is higher than the federal rate.  For example, the basic per-hour minimum wage in California is $9.00 while in Colorado, Massachusetts, New York, and Rhode Island it is $8.00.  (Check your state minimum wage here.)

The general overtime wage rule of the Department of Labor states: Workers who are covered under federal overtime pay protections must be paid at a rate not less than one and one-half times their regular rate of pay after 40 hours of work in a workweek.

Announcement of Delay

The DOL announced in early October 2014 that for a six-month period — from January 1, 2015 to June 30, 2015 — it will not bring enforcement actions against employers for violations of Fair Labor Standards Act (FLSA) obligations resulting from amended regulations announced earlier.

For the following six months, from July 1, 2015 to December 31, 2015, the DOL announced it “will exercise prosecutorial discretion in determining whether to bring enforcement actions, with particular consideration given to the extent to which states and other entities have made good faith efforts to bring their home care programs into compliance with the FLSA since promulgation of the Final Rule.”

Important: Although there is a delay in enforcement of the rules by the Department of Labor, the Final Rule still takes effect on January 1, 2015.  This could result in civil lawsuits against employers by employees for non-compliance starting January 1.

If you have questions about your situation, consult with your payroll tax adviser or attorney.

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