January 29, 2015

Court Vacates Department of Labor’s “Companionship Exemption” Changes

Last year, the U.S. Department of Labor (USDOL) revised its regulations on the “companionship exemption,” which exempts domestic workers who provide companionship services to the elderly or sick from the federal Fair Labor Standards Act’s minimum wage and overtime pay requirements.  The revisions (1) eliminated the companionship exemption for domestic workers employed by third-party employers (e.g., home care agencies) and (2) significantly tightened the definition of “companionship services.”

The revised regulations had been scheduled to become effective on January 1, but on December 22, the U.S. District Court for the District of Columbia vacated the revision that eliminated the exemption for third-party employers.  Then, on January 14, it also vacated the revision that redefined “companionship services.”  In both instances, the court found that USDOL had overstepped its authority by “trying to do through regulation what must be done through legislation.”