DOL Final Rule Extends FLSA Protections to Home Care Workers



Legislation Update Articles Legislation Recently Passed: Regulatory Developments? DOL Final Rule Extends FLSA Protections to Home Care WorkersAutomatic Tipping Under Fire and Restaurants Feel the Heat?Proposed Legislation:New Labor Secretary Calls for Hike in Minimum Wage? Regulatory Developments? ?New Regulations Yield Changes for Employee Benefits? 9/27/2013??Earlier this month, the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) issued guidance and regulations pertinent to the recent Supreme Court decision on the Defense of Marriage Act (DOMA) and the implementation of the Patient Protection and Affordable Care Act.? Interpretation of Marriage in the Wake of U.S. v Windsorright0As part of ongoing agency interpretation of the impact of the Supreme Court’s decision in United States v. Windsor which struck down the provisions of DOMA that denied federal benefits to same-sex couples who were legally married, the Employee Benefits Security Administration (EBSA) of DOL released new guidance on Sept. 18.? According to EBSA, the terms “spouse” and “marriage” in Title I of the Employee Retirement Income Security Act (ERISA) and in related department regulations should be read to include same-sex couples legally married in any state or foreign jurisdiction that recognizes such marriages, regardless of where the couple actually lives or works.In explaining its decision to look to the law of the state or jurisdiction where the marriage occurred (referred to as the “state of celebration” by DOL), the agency cited the difficulty that would be faced by employers with locations in multiple jurisdictions and by employees moving from state to state. EBSA’s guidance clarifies that it covers only relationships identified as “marriage” under state law.? It does not cover other types of recognized unions such as domestic partnerships or civil unions for either same-sex or opposite-sex couples.This guidance follows similar announcements by the IRS and the U.S. Citizenship and Immigration Services, which similarly announced that benefits for spouses and married couples would be valid for marriages legally made in the place where the marriage was celebrated.?? Both the IRS and EBSA anticipate additional guidance in this area.Employer Health Care ReportingOn Sept. 5, the (IRS) issued two proposed rules outlining employer reporting requirements under the Patient Protection and Affordable Care Act (ACA).? One rule implements Internal Revenue Code (IRC) section 6055 and would require insurers, self-insured employers, government-sponsored programs and entities that provide minimum essential coverage to report on minimum essential coverage.? The second rule implements IRC Section 6056 and would require large employers to report to the IRS and to their employees on information regarding the health care coverage they offer to full-time employees. These reporting requirements are meant to help identify whether large employers are in compliance with the “pay or play” requirements of the ACA.? It will also help identify individuals who have been offered coverage by their employers and are, therefore, ineligible for premium tax credits as well as help identify those individuals who are complying with the ACA’s individual mandate and whether they are eligible for premium tax credits because they lack minimum essential coverage.? The lack of rules governing employer reporting was cited by the IRS as one reason for delaying implementation of the employer mandate, and its accompanying penalties, until 2015. The proposed rules require detailed information from employers to identify employees, the type of coverage offered and information on employee’s dependents who are covered under the employer’s plan.? SHRM plans to submit comments to the IRS discussing the practical impact of these rules in the workplace and suggesting ways to streamline the reporting requirements. Comments are due by Nov. 8, 2013.DOL Final Rule Extends FLSA Protections to Home Care WorkersOn September 17, the DOL released its final rule extending FLSA minimum wage and overtime protections to most of the nation's workers who provide essential home care assistance to elderly people and people with illnesses, injuries or disabilities. As a result of the new rule, nearly two million direct care workers, including home health aides, personal care aides, and certified nursing assistants, will now receive the same basic protections already provided to most U.S. workers.The DOL points out the regulatory change will also help guarantee that those who rely on the assistance of direct care workers will have access to consistent and high-quality care from a stable and increasingly professional workforce. The final rule is effective January 1, 2015.Changes prompted by industry developments. In 1974, Congress extended the protections of FLSA to “domestic service” employees, but exempted from the Act’s minimum wage and overtime provisions domestic service employees who provide “companionship services” to elderly people or people with illnesses, injuries, or disabilities who require assistance in caring for themselves. It also exempted from the Act’s overtime provision domestic service employees who reside in the household in which they provide services.The DOL’s final rule revises its 1975 regulations implementing these amendments to the Act to better reflect Congressional intent given the changes to the home care industry and workforce since that time. The most significant change is the DOL’s revision of “companionship services” to clarify and narrow the duties that fall within the term. Moreover, third party employers, such as home care agencies, will not be able to claim either of the exemptions. The major effect of this the final rule is that more domestic service workers will be protected by the FLSA’s minimum wage, overtime, and recordkeeping provisions.The last several decades have seen dramatic growth in the home care industry as more individuals choose long-term care at home instead of in nursing homes or other facilities, the DOL noted in a statement. However, despite this growth and the fact that direct care workers increasingly receive skills training and perform work previously done by trained nurses, direct care workers remain among the lowest paid in the service industry.The final rule also clarifies that direct care workers who perform medically related services for which training is typically a prerequisite are not companionship workers and therefore are entitled to the minimum wage and overtime. Moreover, consistent with Congress' initial intent, individual workers who are employed only by the person receiving services, or that person's family or household, and engaged primarily in fellowship and protection (providing company, visiting or engaging in hobbies) and care incidental to such activities, will still be considered exempt from the FLSA's minimum wage and overtime protections.There are about 1.9 million direct care workers in the United States, nearly all of whom are currently employed by home care agencies, according to the DOL. An estimated 90 percent of direct care workers are women, and nearly 50 percent are minorities.“The department carefully considered the comments received from individuals who receive home care, workers, third-party employers and administrators of state programs that support home care,” said Laura Fortman, the principal deputy administrator of the Wage and Hour Division, the agency that administers and enforces the FLSA. “In response, the final rule provides increased flexibility, and gives programs sufficient time to make any needed adjustments. Together these changes will allow the rule to better meet consumers' needs while better protecting direct care workers.”Sub-regulatory guidance. In conjunction with the release of the final rule, the DOL has issued sub-regulatory guidance, including a frequently asked questions (FAQ) document and a series of fact sheets addressing topics such as the application of the final rule; private home and domestic service employment under the FLSA; companionship services under the FLSA; live-in domestic service workers under the FLSA; and hours worked applicable to domestic service employment under the FLSA. A new web portal includes all of these documents as well as interactive web tools and other materials to help families, other employers and workers understand the new requirements.Webinars. The DOL will also be offering five webinars on the final rule, to be held at the following locations: Thursday, October 3: Northeast Region (ME, NH, VT, MA, RI, CT, NY, PA, NJ, DE, MD, DC, VA, WV, PR), 3:00-4:30 ET;Tuesday, October 8: Western Region (AZ, NV, CA, OR, WA, ID, HI, AK), 10:00-11:30 PT;Thursday, October 10 Midwest Region (OH, MI, IN, IL, WI, MN, IA, MO, NE, KS), 1:00-2:30 CT, 2:00-3:30 ETTuesday, October 15: Southeast Region (KY, TN, NC, SC, GA, FL, AL, MS), 9:00-10:30 CT, 10:00-11:30 ETThursday, October 17: Southwest/Mountain Region (LA, TX, AR, OK, NM, CO, WY, UT, MT, ND, SD), 1:00-2:30, MT; 2:00-3:30 CTRegistration information will be available on the webinar webpage shortly.Source: CCHAutomatic Tipping Under Fire and Restaurants Feel the Heat?9/10/2013?By Stephen Miller, CEBS?Starting in January 2014, the Internal Revenue Service will begin classifying automatic gratuities, which restaurants often add to the bills of large parties, as service charges to be treated as regular wages subject to payroll-tax withholding. Service charges differ from tips, which dining establishments rely on employees to report as income (according to the IRS, servers who receive cash tips of $20 or more in a calendar month are required to report to their employer the total amount).The change was announced in an August 2013 IRS ruling, Topic 761–Tips–Withholding and Reporting. The ruling goes beyond last year’s Revenue Ruling 2012-18, which dealt with taxes imposed on tips and service charges but did not address automatic tipping.The change could have eateries rethinking their policies, attorney John Riccione, co-managing member at Chicago-based law firm Aronberg Goldgehn, told SHRM Online. “The new regulation will mean more paperwork and added costs for restaurants that use automatic tipping,” he noted.“Automatic tipping was originally implemented to ensure waitstaff were compensated for large parties,” Riccione explained. “With the new requirement, restaurants will have to factor the service charge into the hourly pay rate. This means automatic tips are subject to payroll-tax withholdings.”The IRS ruling highlighted the involuntary nature of automatic tipping as the key issue. “If it appears the customer has no say as to what the proper gratuity should be, it falls under the service-charge category,” said Riccione. He predicted “many restaurants will repeal the practice to avoid the added cost” of tax withholding, leaving servers to face the risk of being stiffed.Stephen MillerNew Labor Secretary Calls for Hike in Minimum Wage? ?9/10/2013?By Allen Smith?Secretary of Labor Thomas Perez is on board with worker centers’ call for the federal minimum wage to be raised from $7.25 per hour. Speaking at his swearing-in on Sept. 4, 2013, in Washington, D.C., Perez said: “We must raise the minimum wage and pursue other policies that honor the dignity of work. Nobody who works a full-time job should have to live in poverty.”Noting that at Costco workers earn a minimum of $15 to $20 per hour plus benefits, Perez praised the bulk-goods retailer for providing “real-wage, middle-class jobs.” He criticized those who are skeptical of the effectiveness of minimum-wage increases. “Here’s another false choice—this idea that if workers earn more, somehow that’s going to cripple the economy. History has shown that this is simply incorrect. When we raise the minimum wage, it doesn’t just help working families; it helps the local small business whose customers now have more money to buy more goods and services.”Legendary industrialist Henry Ford, Perez noted, “understood this. In 1914 he doubled the wages of workers on his Dearborn, Mich., assembly line. This is what he said: ‘If we can distribute high wages, then that money is going to be spent, and it will serve to make storekeepers and distributors and manufacturers and workers in other lines more prosperous, and their prosperity will be reflected in our sales. Countrywide high wages spell countrywide prosperity.’ Henry Ford understood that his success depended on the ability of his employees to afford the very cars they were making.”Perez continued: “So many business leaders I have spoken to recognize that you don’t have to choose between shareholders and employees. That a fair wage means a productive workforce, which means a more profitable company. That when the middle class is on the ropes, it affects the corporate bottom line. That business interests are consistent with the common good.”Expand OpportunityThe new Labor secretary also outlined several ways his department could expand opportunity, such as:Investing in the workforce. “The skills gap is an enormous barrier to opportunity, particularly in an increasingly sophisticated economy,” Perez observed. “Many partners have to be in the huddle, with the Labor Department playing quarterback and executing a game plan for a demand-driven workforce investment system that serves the needs of businesses and workers alike.” Ensuring a safe and level playing field for American workers. “We do that by ensuring gender equity in the workplace through the work of our Women’s Bureau and OFCCP [Office of Federal Contract Compliance Programs. We do that by ensuring that people with disabilities and veterans have access to equal employment opportunity. We do that at OSHA [Occupational Safety and Health Administration] and MSHA [Mining Safety and Health Administration], where we’ve helped achieve record-low fatality rates. We do that when EBSA [Employee Benefits Security Administration] secures hundreds of millions for Bernie Madoff’s victims. We do that through Wage and Hour’s enforcement work—a record $280 million in recovered back pay in 2012.”Fixing the broken immigration system. “It’s an economic, law enforcement and humanitarian imperative,” Perez insisted. “Not only would we bring 11 million people out of the shadows … we would create economic growth, promote entrepreneurship, strengthen Social Security and help reduce the deficit.” Take partnerships to a new level. “As the president said in his speech last Wednesday, ‘That’s where courage comes from, when we turn not from each other or on each other but towards one another.’” Sharing his own profile in courage Perez recalled: “I was 12 when my father died, and I had a remarkable community around me. I had five fathers of friends asking me to the father-son breakfasts. I had brothers and sisters helping me with homework. When I went to college I had Pell grants and Perez grants. The government invested in me, and my siblings helped me even though they did not have a lot of money. They helped me obtain the educational building blocks to climb the ladder of opportunity.”Perez summed up the Labor Department’s role as being “in the opportunity business. Through the laws and regulations we enforce, the grants we make and the partnerships we forge, we expand access to opportunity for workers.”Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor. ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download