New Overtime Law for Home-Care Workers Struck Down

New Overtime Law for Home-Care Workers Struck Down

Federal laws require employers to pay their employees overtime pay for all work performed that exceeds eight hours a day, or forty hours a week. These standards are set out in the federal statute known as the Fair Labor Standards Act (FLSA). There are a few exceptions to this overtime requirement, depending on the status of the employee. A recent case has changed the provisions of the FLSA pertaining to home-care workers and overtime.

Judge struck down FLSA's new regulation regarding home-care workers

A new regulation of the FLSA was to go into effect, in January 2015, which would entitle most home-care workers to receiving minimum wage for their work and overtime pay, as well. However, only 10 days prior, a federal judge struck down two very important provisions of that regulation. The result is that the FLSA still exempts any employee who provides "companionship services," from both the minimum wage and overtime requirements. This exemption also applies to "live-in" domestic service providers from receiving overtime.

Why were these provisions rejected by the court?

Had the provisions been allowed to stand, they would have removed the overtime and minimum wage exemptions for home-care workers. In other words, this type of employee would have now been eligible for minimum wage and overtime, like other non-exempt employees. However, several entities filed a lawsuit arguing that the Department of Labor violated the administrative procedures by issuing a new regulation.

Some provisions of the new regulation were allowed to stand

Although the overtime and minimum wage provisions were rejected, there were some provisions that were allowed to remain intact. One particular provision restricts the definition of "companionship services," which in turn limits the exempt duties a home-care worker provides. In other words, the activities for which a home-care worker can receive minimum wage or overtime pay has been increased by this new provision.

Types of wages not covered by the FLSA

Among other things, the FLSA does not deal with pay raises, vacation or holiday pay, sick pay or severance. It is important to note that, under the FLSA, being required to work on weekends or nights does not automatically entitle you to overtime. Overtime is defined only as hours worked over 40 hours in a work week.

Who is exempt from the minimum wage requirement under the FLSA?

Not every type of employee is guaranteed minimum wage. Some employees are considered exempt based on the type of work they do or the industry in which they work. For example, the following types of employees are exempt from minimum wage under the FLSA:

  • commissioned sales employees
  • computer professionals
  • drivers and driver's helpers,
  • loaders,
  • mechanics,
  • farmworkers,
  • salesmen
  • seasonal and recreational establishments,
  • executives, administrative, and professional employees

Employees who receive tips, such as waiters and delivery employees have a different minimum wage limit. According to the Department of Labor, a tipped employee must be paid at least $2.13 an hour in wages, if that amount plus tips received equal at least the federal minimum wage. The employee must retain all tips and regularly receive more than $30 per month in tips. If, however, with tips, the employee's wages do not equal the federal minimum hourly wage, the employer is required to make up the difference. So, essentially, tipped employees should ultimately receive minimum wage.

If you feel you have been denied overtime or minimum wage, or if you have any other questions regarding your employment rights, please contact Wrady & Michel, LLC, either online or by calling us at (205) 265-1880.

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