CHA News Article

U.S. Supreme Court Declines Home Care Agencies’ Request to Delay Rule on Minimum Wage, Overtime
Rule takes effect today

Last week, the U.S. Supreme Court declined a request by multiple home care agencies to delay the final rule requiring “companions” employed by third-party agencies to be paid minimum wage and weekly overtime. Therefore, elimination of the existing exemption for third-party employers, established by the Department of Labor (DOL) home care rule, takes effect today, Oct. 13. The DOL has indicated, however, that it will not begin enforcement until Nov. 12. In California, the impact of the new rule depends on whether an employer is a public hospital or other entity, private hospital or private stand-alone home health home care or home-based hospice agency.

Under California law, companions are referred to as “personal attendants.” In general, personal attendants are defined as individuals employed by a private householder — or by any third-party employer recognized in the health care industry to work in a private household — to supervise, feed or dress a child or a person who by reason of advanced age, physical disability or mental deficiency needs supervision. To qualify as a personal attendant, the individual cannot spend more than 20 percent of their time on other work, such as cleaning.

California’s minimum wage and overtime rules for personal attendants contain several relevant exemptions. One major exemption is that public employers, including special districts, are not subject to California’s overtime provisions. Thus, the most significant impact of the new rule will be felt by public hospitals/health systems if they have been utilizing the companion overtime exemption under the Fair Labor Standards Act (FLSA) and the DOL regulations. Because the new rule eliminates that exemption, public employers will need to comply with the new DOL final rule beginning Oct. 13. For more information, visit the DOL’s website.

Personal attendants providing services in a patient’s home and employed by a private employer other than a hospital or long-term care facility (e.g., stand-alone home health, home care or hospice) are covered by Wage Order 15. These personal attendants were exempt from California’s overtime rules until Jan. 1, 2014, when a new law began requiring that they be paid overtime after nine hours per day and after 45 hours per workweek. Because these employers are also subject to the FLSA and DOL regulations, they will have to pay overtime after 40 hours per week beginning Oct. 13, while continuing to pay daily overtime after nine hours per day. It is important to note, however, that neither state nor federal law requires pyramiding of overtime.

Private California hospitals should experience no impact from the new DOL rule. California’s Wage Order 5 already requires minimum wage and weekly overtime for personal attendants employed by nonprofit hospitals and long-term care facilities. Wage Order 5 also requires for-profit hospitals and long-term care facilities to comply with California’s general overtime rules for all employees, mandating overtime after eight hours in a day or 40 hours in a workweek, and double time after 12 hours.

Given the complexity of this issue, it is recommended that entities employing personal attendants or companions consult with experienced legal counsel to ensure compliance with applicable laws.