Correspondence

Dear Secretary Perez:

On October 1, the U.S. Department of Labor published a final rule making significant changes to the long-standing minimum wage and overtime exemption for companionship services under the Fair Labor Standards Act (FLSA).  When this regulation takes effect, on January 1, 2015, it will create a new definition for what constitutes companionship services—limiting the duties and tasks allowable under the exemption.  It will also draw a distinct and unnecessary line between caregivers by making those who provide service through a third-party subject to the FLSA’s requirements, while leaving the status of those hired though an individual or family member unchanged.  These significant changes will undoubtedly impose new costs and mandates on companion care providers, reducing the availability of in-home care for seniors, the infirm, and individuals with disabilities.  Given the likely harm of this rulemaking, we request detailed information from the department to better understand and assess its consequences. 

Since October 2011, the Committee on Education and the Workforce has engaged in oversight of the department’s efforts to change the companionship exemption.  Specifically, we wrote to the department on October 7, 2011, requesting information on the rulemaking.  Given the rule’s novel and complicated issues, on February 10, 2012, we requested a 60 day extension for the public comment period.  We were disappointed the department failed to provide the extension, instead granting piece-meal extensions amounting to only 23 days.

On March 20, 2012, the Workforce Protections Subcommittee held a hearing with Ms. Nancy Leppink, then-acting administrator of the Wage and Hour Division.  Witness testimony highlighted the potential negative consequences of this rulemaking, including fewer hours of work for employees, higher costs, and concerns that seniors and individuals with disabilities must give up their independence and move into institutional care.  Further informed by this testimony, Subcommittee Chairman Tim Walberg wrote again to seek information on July 7, 2012.  Unfortunately, the department’s responses were incomplete and insufficient.  Despite promises to keep the committee informed, the department did not even provide notice of the final rule’s publication.

To read the full letter, click here.