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Can Agencies Continue to Use the Companionship Services Exemption?

Indianapolis law firm of Gilliland & Caudill, jcg{at}gilliland.com

The companionship services exemption is an important way many private duty agencies are relieved of the requirement to pay minimum wage and overtime pay under the federal Fair Labor Standards Act. However, a recent decision of a U.S. Court of Appeals held for the first time that this exemption cannot be used by third-party employers such as agencies. Although it is significant, that decision is only binding in New York, Vermont, and Connecticut, and the agency involved could still avoid liability because of other defenses. Depending on their specific situations, agencies in other states may reasonably conclude to continue to use the exemption.

Key Words: companion • minimum wage • overtime • FLSA exemption

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