Elder Care and the Companionship Service Exemption to FLSA[i]

Employee productivity is directly impacted by family care issues. In fact, more employee productivity is spent on elder-care issues than on child-care issues.[ii] It is estimated that as the population continues to grow, most employees will be affected by elder-care issues during their career.[iii] As this trend continues, employers would be wise to educate their employees on relevant employment issues and laws.

Harkening back to the days of the Clinton Era and “Nanny Gate”, the issue of whether household employees could be non-exempt has been an entertaining question, with an often elusive answer. For many household professionals this issue raised the specter of having to pay additional taxes or wages on household employees. Today the question remains: what are the wage and hour laws for household employees? Just exactly how do you draw the line between exempt and non-exempt household employees?

In 1979, amendments to the FLSA added domestic service regulations that provided guidance in determining when a homecare employee is exempt or non-exempt. Specifically, 29 U.S.C. Section 213(a)(15) provides that homecare providers can qualify as exempt employees if they solely render elder companionship services. The Department of Labor’s regulation implementing this provision provides that companionship services do not include time spent on “general household work” that exceeds 20% of total weekly hours worked.[iv] Any time spent over 20% of total weekly hours qualifies for overtime under the FLSA.[v]

A recent Fifth Circuit case interpreted this provision and clarified exactly what kind of work qualifies as non-exempt. In Nelms v. Kramer, a former eldercare provided sued her ex-employee claiming that she qualified for over-time pay under the Fair Labor Standards Act (FLSA).[vi] On Appeal, the court was faced with only one question: “whether the Plaintiff’s services fell within the companionship service exemption provided for in 29 U.S.C. Section 213(a)(15).”[vii]

The court in Nelms had to determine if the Plaintiff had in fact performed an adequate amount of general household work to qualify for over-time pay. The Defendant claimed that she not only committed time specific to elder-care, but that she did other general household work for the benefit of the entire family. In the end, the evidence that defeated the Plaintiff’s claim was receipts entered into evidence by the Defendants to controvert the Plaintiff’s claim that she had spent over 20% of her total weekly work time cooking for the entire family. The court noted that testimony from either party was inconclusive, but that the receipts were sufficient to rebut the Plaintiff’s claim that she had committed enough time to “general household care.”

The take away from all of this is simple: many employees are not used to also acting as employers, and thus being affected by laws like the FLSA. Cases like Nelms illustrate the importance of educating your employees as to relevant homecare laws that could affect them. As the population continues to grow, an increasing amount of employees may be switching to an employer role when they get home. Educate your employees so that they know when they are liable for paying non-exempt home-care employees, and what kind of work activities may trigger non-exempt employee status. Educating your employees as to these issues will go a long way towards helping keep productivity up at the office.

Bryant S. Banes
Managing Shareholder
Neel, Hooper & Banes, P.C.
Houston, Texas