Proving the FLSA ­Companionship Exemption

The Federal Labor Standards Act places minimum wage and hour requirements on employers. Unless an exemption applies, the FLSA requires overtime pay for employees working more than 40 hours in a workweek. If an employee works more than 40 hours, the employer must pay one and one-half times the employee's regular rate for each extra hour worked. See 29 U.S.C. § 207. The FLSA delineates several exemptions from the wage and overtime requirements. See 29 U.S.C. § 213.

One example, known as the "Companionship Exemption" is frequently the subject of litigation. See 29 U.S.C. § 213(a)(15). This article discusses the 2015 changes that limited the scope of the Companionship Exemption. These changes affected an employer's likelihood of defeating a FLSA claim and underscore the importance of thorough litigation strategies.

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The companionship exemption

The Companionship Exemption applies to those "employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves." See 29 U.S.C. § 213(a)(15). The statute allows the Department of Labor to define "companionship services." Id.

For decades, the Department of Labor defined "companionship services" as including fellowship, care, and protection services. Fellowship includes engaging the elderly or infirmed "person in social, physical, and mental activities, such as conversation, reading, games, crafts, or accompanying the person on walks, on errands, to appointments, or to social events." 29 C.F.R. § 552.6(a). Protection "means to be present with the person in [the person's] home or to accompany the person when outside of the home to monitor the person's safety and well-being." Id.

Under the old regulation, the provision of "care" included "activities such as cleaning the patient's bedroom, bathroom or kitchen, picking up groceries, medicine, and dry cleaning." See Department of Labor Opinion Letter on FLSA dated March 15, 1995. These activities were deemed automatically exempt under the Companionship Exemption because they were related to the personal care of the person. Id. A companion still qualified under the exemption if the job duties included general household work, unrelated to the person's care (such as trash removal, cleaning refrigerators and ovens), so long as these tasks did not exceed 20% of the companion's workweek. See Bonn-Wittingham v. Project O.H.R. (Office for Homecare Referral), Inc., 2016 U.S. Dist. LEXIS 172767, *9, (E.D.N.Y. 2016).

For purposes of the exemption, "companionship services" does not include work required to be performed by medical professionals. See Gayle v. Harry's Nurses Registry, Inc., 594 Fed. Appx. 714, 718 (2d Cir. 2014).

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Recent changes

Under the Obama Administration, the Department of Labor enacted a new definition of "companionship services" so that "only 'fellowship and protection' services are automatically exempt from FLSA protection." Bonn-Wittingham, 2016 U.S. Dist. LEXIS 172767 at *9. The provision of care is now exempt only "if the care is provided attendant to and in conjunction with the provision of fellowship and protection and if it does not exceed 20 percent of the total hours worked per person and per workweek." See 29 C.F.R. § 552.6(b).

Many activities formerly automatically exempt such as the light housework related to a patient's care (e.g. cleaning of the patient's bedroom and bathroom) are now subject to a 20 percent limitation. Further, the regulation "narrowed the companionship exemption to exclude aides employed by third-party agencies, thereby bringing such aides within the ambit of the FLSA." Shillingford v. Astra Home Care, Inc., 2018 U.S. Dist. LEXIS 29576, *13 (S.D.N.Y. 2018); 29 C.F.R. § 552.109.

These changes significantly limit the pool of companion workers who are exempt from FLSA protection.

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Potential damages

Employers who violate the FLSA face expensive consequences. A prevailing employee is owed the unpaid amount (wages or overtime rate), and liquidated damages in the same amount, doubling the award. See 29 U.S.C. § 216(b). Significantly, an employee who prevails on a FLSA claim is also entitled to recover his attorneys' fees from the employer. Id. The exposure must be considered in formulating pre-suit and litigation strategies.

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Asserting the Companionship Exemption

An employer facing the steep damages allowed under the FLSA would be understandably eager to have the case dismissed. But, it is difficult to have a FLSA case dismissed under the Companionship Exemption because it is the employer's burden to prove an exemption and the necessary analysis often leads to factual disputes. Further, under the new regulation, the exemption is limited.

A FLSA plaintiff does not need to plead facts establishing status as a non-exempt employee. Instead, an employer claiming a FLSA exemption must plead it as an affirmative defense and bears the burden of proving the exemption. See Henry v. Nannys for Grannys Inc., 86 F. Supp. 3d 155, 158-159 (E.D.N.Y. 2015).

For this reason, even under the old "companionship services" definition, courts typically did not grant an employer's motion to dismiss. See Beaulieu v. Vermont, 2010 U.S. Dist. LEXIS 101192, *20 (D. Vt. 2010) ("The exemption categories delineated by the FLSA are not designed to thwart nascent claims, but rather, are available affirmative defenses to be fleshed out during the discovery process."). Only in rare cases could the pleadings themselves establish exemption. See Feldman v. Bhrags Home Care, Inc., 2017 U.S. Dist. LEXIS 35624, *9 (E.D.N.Y. 2017) (none of the work alleged in the complaint constituted heavy cleaning unrelated to the person's care).

Moreover, FLSA companionship cases are susceptible to factual disputes, making it difficult for an employer to prevail on a summary judgment motion. See Santana v. Brown, 2015 U.S. Dist. LEXIS 106765, *7 (S.D.N.Y. 2015) (summary judgment denied when the parties dispute whether plaintiff spent more than 20 percent of her work hours cleaning the house and sidewalk).

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Decisions interpreting the new rule

Recent court decisions reflect the increasing difficulty of an employer's ability to rely on the Companionship Exemption. See Bonn-Wittingham, 2016 U.S. Dist. LEXIS 172767, *10 ("any complaint that adequately pleads the inapplicability of the companionship exemption under the old regulations meets the requirements of the new regulations."); Dudley v. Hanzon Homecare Servs., 2018 U.S. Dist. LEXIS 8112, *7 (S.D.N.Y. 2018) (undisputed that, beginning January 1, 2015, the FLSA exemption did not apply employees of third party employers).

It is important for employers, including private individuals, to be educated about FLSA requirements so that effective litigation strategies can be formulated.

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Robert P. Yawman III is an associate with the law firm Leclair Korona Vahey Cole LLP. His practice includes all levels of litigation from pre-suit matters to appellate practice. He advises clients on employment matters including wage and hour disputes. Yawman can be reached at ryawman@leclairkorona.com or through the firm's website at www.leclairkorona.com.

Published: Wed, Apr 04, 2018