F/EA will comply with the Fair Labor Standards Act Home Care Rule announced by the Department of Labor on October 1, 2013 and effective October 13, 2015. The Home Care Rule narrows and clarifies circumstances under which the companionship exemption from minimum wage and overtime may be taken and the live-in exemption from overtime may be taken. In addition, the Rule clarifies the Department's position on joint employment as determined using the economic realities test. The Rule also contains guidance on shared living scenarios.
The guidance on joint employment in particular holds profound implications for self direction programs. If a third party joint employer is found to exist in an employment relationship, the third party joint employer cannot use the companionship exemption nor the live-in exemption.
Due to DOL's joint employment guidance, third party overtime and travel time may have to be paid when a worker is employed by multiple participants in a program, depending on whether a joint employer (e.g., an FMS provider, state, or managed care organization) exists. If so, all hours worked over 40 per work week must be paid at time and a half, with overtime not paid from any participant's budget but by the third party joint employer if the participant was not personally responsible for overtime. For example, Employee Z works for Participant A for 20 hours per week and Employee Z works for Participant B for 25 hours in the same work week. Employee Z travels from one shift for Participant A to another shift for Participant B. 5 hours of overtime must be paid to Employee Z, but not from Participant A or B's budgets. In addition, travel time from Participant A to Participant B must be compensated by the third party joint employer as wages.
Despite not being employers per the IRS's common law test, Fiscal/Employer Agents can be joint employers per DOL's economic realities test.
