Department of Labor Guidance Issued for the Employment Status of Home Caregivers

Home caregivers are some of the most common workers to deal with employment law issues. The nature of their work, often working nearly around the clock, and several other factors all throw additional monkey wrenches into the situation.

Whether you’re a home caregiver, personally employing a home caregiver, employing one through an agency, or working for such agency either hiring out or referring caregivers, these issues have been a thorn in your side for years.

The lack of clarity on them has only made matters worse as the last time the Department of Labor gave any guidance on the issue was back in 1975. This lack of clear rules has led to an enormous number of lawsuits alleging misclassification for overtime purposes, wage-and-hour issues, joint employment questions, and more.

Thankfully, the Department of Labor has finally taken steps to at least start giving the law on home caregivers some better defined rules. In mid-July they released a new Opinion Letter entitled “Paying Minimum Wage and Overtime to Home Care Workers: A Guide for Consumers and their Families to the Fair Labor Standards Act”.

This new opinion letter is a very dense 25 pages but contains crucial information on how these situations should be handled and positions that would be extremely persuasive to a court ruling on such an issue.

We’re going to walk you through what the guidance says and break it down into more easily digestible chunks. The guidance is based around Federal Labor Standards Act (the federal law setting minimum requirements around the country for minimum wage, recordkeeping, overtime rules, and more) and will have an impact in every state–regardless of state laws enhancing these minimum requirements.

Who is the Department of Labor Guide Meant to Help?

As mentioned, if you have a home caregiver you need to know that you’re not staring down a potential lawsuit. This raises the first question, who counts as what the DoL guidance refers to as a “home care worker.”

Perhaps the simplest element of this is that these workers have to provide services in, lo and behold, a home–a private home at that. They provide personal and health-related services but do not need to be nurses or anything of that sort–the title encompasses everything from a personal attendant to an in-home nurse and quite a few things in between.

These workers can either be full time live in workers or just come in from the outside. They can even be a family member helping you at home in the right circumstance, although this can be a bit more complicated.

If you have somebody providing these sorts of services, or even if you are provided one by a third-party service, there’s a good chance you are an employer to this person and this guide applies to you. It also applies if you are a part of a household where somebody is providing such services–whether a family member or domestic partner.

When are You the Employer of a Home Care Worker?

The circumstances by which a person comes by a home caregiver can vary substantially. However, just because you have one does not necessarily make you their employer. If you went out and found the caregiver yourself and hired them, maybe even made a contract with them, you’re almost certainly that caregiver’s employer.

If you worked through an agency, then things are a bit more up in the air as to whether the employer obligations of the FLSA apply to you–making you personally responsible for overtime, classification, etc.

If you set the caregivers schedule and tell them what to do from day to day, this means you are more likely to be an employer. The same goes for if you can hire/fire the caregiver. Some other elements that weigh towards you being an employer include interviewing caregivers for the position or requiring references (not basic background checks), directly setting their pay rate, actually paying a caregiver directly yourself, keeping records of time worked by a caregiver, or paying for the caregiver’s supplies, training, or licenses.

Even if there is an agency who referred the caregiver to you, or even ultimately controls much of the caregiver’s day to day work, you may still be a joint employer if you have the sort of power described above–a situation where both you and the agency have employer obligations. The DoL guidance goes as far as to say that if you hired the caregiver through an agency you probably are at least their joint employer.

You don’t both have to pay the worker, but you are both responsible in the eyes of a court. That being said, if you’re hiring through an agency they’re probably at least handling the payment and records side of the FLSA–although you should make sure.

However, it’s worth noting that the DoL makes a distinction between an agency which handles caregivers and hires them out and agencies which refer caregivers to clients. The latter, an agency providing a registry connecting caregivers and clients but otherwise has no control, is explicitly not an employer for FLSA purposes in the DoL’s eyes.

Special Employment Situations and Rules for Caregivers

If you are an employer for your caregiver, you could very find yourself on the hook for some serious coin if you find yourself on the wrong end of an unpaid overtime or misclassification lawsuit. We’ve discussed the rules of overtime in the past so we won’t go into too deep of detail on them.

However, essentially you generally can’t make somebody work over 40 hours a week, 8 hours a day, or–in some states–more than 6 days in a row without paying overtime pay. If they work over 12 hours in a day you can get to some even higher paid situations.

There are a number of exemptions to who you have to pay overtime; generally they apply if you make more than a certain amount or work in positions with a certain level of independent responsibility and authority. When it comes to caregivers, the DoL opinion letter has a number of special rules and exemptions along these lines.

For instance, there is a companionship overtime exemption to the usual minimum wage and overtime pay rules. The exemption applies where at least 80% of a caregivers workweek is spent keeping you company as opposed to any sort of personal care such as bathing, dressing, grooming, cooking, cleaning, etc.

The exemption cannot apply to a caregiver who does any medically related tasks whatsoever, tasks usually done by a nurse or nursing assistant such as handling a catheter or tube feeding. The caregiver also cannot perform any general household work for the household as a whole such as laundry or cooking.

We mentioned at the very beginning of the article that caregivers have some special issues as a practical matter since they often live in homes of their clients. This creates a situation where, at least from the outside, they’d appear to basically be working all day every day. However, the new DoL opinion letter clarifies a special FLSA rule that means these live-in caregivers are not required to be paid overtime.

They still need to be paid at least minimum wage for all hours worked but, so long as they live with you, you won’t need to pay overtime. This only applies if you are personally paying a caregiver, agencies are always required to pay overtime–a cause of much misclassification as there is enormous incentive to misclassify caregivers as independent contractors to avoid paying overtime to live-in workers. In calculating the hours worked of a live-in caregiver you can exclude sleep time, meal breaks, off-duty time (so long as you truly let the caregiver do whatever they like during this time and the break is long enough for them to practically make good use of the time) can be excluded.

How this is set up must be handled by a written agreement so long as the terms of that agreement are reasonable. From there, you just have to make sure you follow the agreement or you could find yourself in serious FLSA trouble.

In determining the number of hours for which a live-in home care worker must be paid, you and your employee can create an agreement regarding the worker’s schedule. It can exclude from work time: Sleep time, Meal breaks, and Other periods of off-duty time when the worker may either leave or stay at the home for purely personal pursuits (provided such a personal break is long enough for the worker to make effective use of the time).

You and your live-in home care worker can reach any agreement regarding paid time that is reasonable given the facts of your situation. However, if any part of the time that is supposed to be for sleeping, meal breaks, or other periods of free time is interrupted by work, the worker must be paid for the time spent working. You and your live-in home care worker should update the agreement whenever there are significant differences between the unpaid times in the agreement and the worker’s actual schedule.

Finally, one other special consideration is the fairly common situation where the caregiver is a member of your family or household. This creates a bit of an odd set of circumstances. The caregiver is an employee to whoever directs their services–whether it’s you or an agency-however under the DoL guidance time spent under a familial relationship isn’t covered by FLSA minimum wage or overtime rules.

This means that any “natural support” you’d give a family member doesn’t need to be paid whatsoever. However, they still need to be paid for the work done that falls within their employment relationship. Under the DoL guidance, the exact boundaries of what an employment relationship is determined by looking at a plan of care or written agreement.

If no such plan exists, the presumption will generally just be that there is no employment relationship. This means that it’s extremely important to clearly delineate what sort of relationship you’re looking for if a family member of household member is acting as a caretaker for you or a loved one.

This is a Huge Step Forward in Clarity for Home Caregivers

The practical twists and turns innate to the profession of home caregiving make it one of the more litigated professions when it comes to employment law. This has been the case for decades as agencies and individuals struggled to avoid costly lawsuits and legal struggles. This DoL guidance is the most substantial offering on the issue since Gerald Ford was president.

That being said, it is also a time to review practices and make sure you’re compliant with the guidance of the DoL. Whether you’re an agency or an individual in need of in-home help, this new guidance will be just as useful to the Wage and Hour Division of the U.S. Department of Labor in pursuing lawsuits. With the guidance out there, those in violation don’t have the excuse of lack of clarity when the DoL comes a-knocking. It’s more important than ever to know how this works whether you’re hiring a caregiver or you are one.

Jonathan Lurie is a Founding Partner of The Law Offices of Lurie and Ferri (Contact Info). He primarily handles business law, employment law, and intellectual property issues, but works with all types of civil matters. He is a Vice-Chair of the Sports and Entertainment Interest Group of the California Intellectual Property Section and has won awards for his knowledge of intellectual property, start-up business issues, and California civil procedure.