Home companions and live-in nannies may become entitled to overtime, under the latest Department of Labor Notice of Proposed RuleMaking (NPRM) affecting the Fair Labor Standards Act (FLSA).
A limited exemption was written into the US FLSA law in 1974 for casual babysitters and companions for the aged and infirm. At that time, Congress also created an exemption from the overtime pay requirement only for live-in domestic workers who still must receive the minimum wage. Now DOL wants to modify those rules and require overtime to millions of workers who currently qualify for exemptions under the status quo regulatory interpretations.
"Although the regulations governing exemptions have been substantially unchanged since they were promulgated in 1975, the in-home care industry has undergone a dramatic transformation. There has been a growing demand for long-term in-home care, and as a result the in-home care services industry has grown substantially. However, the earnings of in-home care employees remain among the lowest in the service industry, impeding efforts to improve both jobs and care. Moreover, the workers that are employed by in-home care staffing agencies are not the workers that Congress envisioned when it enacted the companionship exemption (i.e., neighbors performing elder sitting), but instead are professional caregivers entitled to FLSA protections. In view of these changes, the Department believes it is appropriate to reconsider whether the scope of the regulations are now too broad and not in harmony with Congressional intent." (http://www.dol.gov/whd/flsa/companionNPRM.htm)
The revisions in the 56-page document published in the Federal Register of December 27, 2011, would clarify definitions of “domestic service employment” and “companionship services.” DOL also proposes to narrow the type of duties permitted for exempt companions, to require tighter record-keeping requirements for live-in domestic workers and to deny exemptions to employees of third party employers such as staffing agencies. Law firms advise their clients who supply nannies and domestic home-care workers to expect steep labor cost increases. This is all quite consistent with the DOL’s broad theme of Plan/Prevent/Protect.
This latest regulatory tweak might not extend minimum wage or overtime protections to babysitters but it certainly does spread a wider net over domestic companions and home-care workers of various types. The overtime enforcers appear to be attempting to lasso more of the helpers and caregivers involved in serving our growing assistance-needing and increasingly elderly population. Observers of the US political scene know that every administration wants a record of creating good jobs when it seeks re-election. If you don’t control Congress to the extent that you can create massive public works projects similar to those of the Great Depression, the next best attention-grabber during an economic downturn is to be seen as forcing recalcitrant employers to increase the pay for bad jobs in order to make them more palatable. That was the intent in 1938, too. It was no accident that the Fair Labor Standards Act requiring overtime in America was passed during the depression doldrums when so many were unemployed that companies could hire workers for peanuts.
This is a test: What was the first minimum wage established by the FLSA in 1938?
E. James (Jim) Brennan is Senior Associate of ERI Economic Research Institute, the premier publisher of interactive pay and living-cost surveys. Semi-retired after over 40 years in HR corporate and consulting roles throughout the U.S. and Canada, he’s pretty much been there done that (articles, books, speeches, seminars, radio/TV, advisory posts, in-trial expert witness stuff, etc.) and will express his opinion on almost anything.
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