The Department of Labor’s (DOL) Home Care Rule, which excludes employees of third-party employers from the companionship and live-in domestic service worker exemptions to the Fair Labor Standard Act’s (FLSA’s) overtime and minimum wage requirements, is now effective.
 
Home care employers who have previously relied upon the companionship and/or live-in domestic service worker exemptions must prepare to begin paying overtime or rescheduling their employees so that they do not work more than 40 hours in a week — some states have more stringent overtime requirements.
 
Below are some key compliance tips to assist in reclassifying home care employees as non-exempt.
 
Follow these pay practices  
  • Pay hourly rates, not daily rates. When paying a day rate, an employer is required to pay the full day rate, regardless of whether the employee works a full schedule. An hourly rate avoids this potential additional expense.
  • Pay caregivers on the company’s scheduled payment calendar, even if the caregiver fails to report time. You can make any necessary adjustments later. All adjustments should be documented and certified as accurate by the employee.
  • Communicate any changes to pay to employees, and use agreements to memorialize compensation plans. Some states require a certain period of notice before changing rates of pay, so consult with an attorney.
Track hours worked and timekeeping
  • Evaluate whether a current method exists for recording travel time. Some telephony systems and paper timesheets only allow home care employees to record time spent with a client and not, for example, time spent traveling from client to client. If necessary, retool your timekeeping system to capture such time. 
  • Pay mileage to minimum wage employees, and remember that payment of mileage is not the same as payment for travel time. Minimum wage employees must be compensated for business mileage to ensure that the expense does not bring their wages below the minimum wage or cut into any overtime due. Also, mileage is no substitute for payment of the time spent traveling.
  • Ensure meal tracking in states requiring meal periods and where the company deducts meal periods from working time. Additionally, under federal law, if a meal period is missed or interrupted, the full meal period should be paid.
  • Track and compensate orientation time. Even if you classify orientation as “pre-employment,” most orientation time will be considered compensable working time. 
  • Require employees to certify all working time. Timesheets or telephony scripts should include language requiring the employees to confirm that they have reported accurate and complete working time for the workweek. The employee’s certification should be retained in your records.
  • Enter into reasonable agreements with live-in caregivers regarding expected work schedules and sleep periods, but make sure to record actual hours worked. It is a common practice in the home care industry to exclude sleep time from compensable working time, but to do so, you must reach an agreement with the live-in employee prior to excluding the time. Note that the agreement is no substitute for recording actual hours worked and paying for actual hours worked. In some states, it is very challenging to exclude sleep time, so consult with an attorney before engaging in this practice.
About the author: Lucas Deloach is an associate attorney with Littler Mendelson in Atlanta. He advises and represents employers in all areas of labor and employment law.