June 23, 2006 FLSA2006-13NA
Dear Name*:
This is in further response
to your request for an opinion asking how the companionship services exemption
under section 13(a)(15) of the Fair Labor Standards Act (FLSA) (copy enclosed) applies
to agency employees working in supported living homes for developmentally disabled
individuals that are operated by private community agencies in your state.
According to your letter, private
agencies operate supported living homes for developmentally disabled individuals.
The companion is an employee of the sponsoring agency, which pays the salary,
benefits, and housing costs for the employee. Neither the individuals living at
the home nor their families pay the companion directly or indirectly. Employees
of these agencies live in the homes as companions caring for the individuals
with disabilities. Usually, the supported living homes are occupied by multiple,
unrelated individuals with developmental disabilities for whom companionship
services are provided.
In a telephone conversation
with a member of your staff, we received additional information regarding the
operation of the homes. Financial support for the developmentally disabled
individuals comes from sources such as Medicare payments, federal and state
Medicaid payments, and Supplemental Security Income payments. Generally, up to
three developmentally disabled individuals live in the homes. They often are placed
in a home after leaving a state institution, typically with other individuals
also leaving the institution. They may have some choice in selecting
housemates, in that the providers attempt to ensure that the residents will be
compatible; however, their choices are limited. There is at least one staff
member present in the home at all times, and perhaps additional staff members
and/or supervisors depending upon the level of disability of the residents. Meals
are furnished to the residents, and residents may have some input in the
selection of the meals at some homes, although some providers have fixed weekly
menus. Often the service provider owns the home and leases it to the residents,
although other types of arrangements also exist. Some providers are for-profit
companies, while others are not-for-profit entities. Although the residents may
assist with keeping the house clean if they are able, the provider has overall
responsibility for maintenance and upkeep of the home.
To qualify for the section
13(a)(15) companionship services exemption, the work itself must qualify as
domestic service employment, which means that it must be performed in or about
a private home. 29 C.F.R. § 552.101(a) (copy enclosed). Employees working
in dwelling places that are primarily rooming or boarding houses do not qualify
for the exemption, because the places they work are not private homes; rather
they are business establishments. 29 C.F.R. § 552.101(b). Based on the
information provided and the factors the courts have considered when evaluating
whether similar supported living facilities were the private homes of the disabled
individuals, it is our opinion that the facilities you describe are not private
homes for purposes of the exemption. Whether a living arrangement qualifies as
a private home is a fact-specific determination, and we base this conclusion on
the facts of this case. See Wage and Hour Opinion Letter February 9, 2001
(copy enclosed). To the extent that any particular home varies from that
description, a different determination might result.
The legislative history of
this exemption states that "a dwelling house used primarily as a boarding or
lodging house for the purpose of supplying such services to the public, as a
business enterprise, is not a private home." S. Rep. No. 93-690, at 20
(1974). The Senate Report also discusses the term "private home," noting that "the
domestic service must be performed in a private home which is a fixed place of abode
of an individual or family. A separate and distinct dwelling
maintained by an individual or family in an apartment house or
hotel may constitute a private home. However, a dwelling house used primarily
as a boarding or lodging house for the purpose of supplying such services to
the public, as a business enterprise, is not a private home . . . ." Id. (emphasis added). See also Johnston v. Volunteers
of Am., 213 F.3d 559 (10th Cir. 2000), cert. denied, 531 U.S. 1072
(2001); Madison v. Resources for Human Development, Inc., 233 F.3d 175
(3d Cir. 2000); Wage and Hour Opinion Letters May 14, 2001 and November 25, 1975
(copies enclosed).
The court in Welding v.
Bios Corp., 353 F.3d 1214 (10th Cir. 2004), identified six factors that it
and other courts have considered relevant in evaluating whether a residence is
a private home. The court stated that the overall inquiry focuses on "who has
ultimate management control of the living unit and whether the living unit is
maintained primarily to facilitate the provision of assistive services." Id. at 1219. The first factor is whether the client
lived there before beginning to receive services from the provider, because if
the individual would live there independently of the receipt of services that
is a "powerful indicator that the residence is a private home." Id. The second factor is who owns the living unit,
because if the service provider owns the unit "that is a significant indicator
that it is not a private home." Id. The third
factor is who manages and is ultimately responsible for maintaining the
residence, such as by paying the mortgage or rent, paying utilities, providing
clean linens and providing food, because if the service provider has control
over such essentials of daily living, "that weighs strongly in favor of it not
being a private home." Id. at
1219-20. The fourth factor is whether the client could live in the unit if the
client were not contracting with the provider for services. The fifth factor is
the relative difference in the cost/value of the services provided and the
total cost of maintaining the living unit, and the sixth factor is whether the
service provider uses any part of the residence for its own purposes such as an
office for employees.
Other courts have looked at
additional factors, emphasizing that all relevant factors must be considered. Those
factors include: whether significant public funding is involved; who determines
who lives together in the home; whether residents live together for treatment
purposes as part of an overall care program; the number of residents; whether
the clients can come and go freely; whether the employer or the client acquires
the furniture; who has keys and access to the home; and whether the provider is
a for profit or not for profit entity. See, e.g., Johnston v.
Volunteers of Am., 213 F.3d at 563-65; Linn v. Developmental Services of
Tulsa, Inc., 891 F. Supp. 574 (N.D. Okla. 1995); Lott v. Rigby, 746
F. Supp. 1084 (N.D. Ga. 1990).
Thus, the fact that the home
is the sole residence of the client is not enough to make it a private home
under the FLSA. For instance, in this situation, the residents in the homes
described are placed in a residence outside their family home and without the
full-time, live-in care of a relative. They are housed in a residence with
strangers who are also in need of the care being provided, and they are housed
together for the purpose of providing needed services. The service provider
often owns the residence, and the clients did not live there prior to moving
there to receive services. The clients' choices of what to eat and with whom to
live are circumscribed. Although the residents may assist with the upkeep of
the home, the provider is ultimately responsible for the maintenance and upkeep
of the residence. Government funding is a revenue source and, given the high
ratio of staff to clients, it appears that the cost of the services likely is a
significant portion of the cost of the residence. Therefore, these residences
are not private homes, and the work performed by private agency companions at
such facilities would not come within the scope of the exemption provided by section
13(a)(15) of the FLSA. See Wage and Hour Opinion Letter May 14, 2001.
This opinion is based
exclusively on the facts and circumstances described in your request and is
given based on your representation, express or implied, that you have provided
a full and fair description of all the facts and circumstances that would be
pertinent to our consideration of the question presented. Existence of any
other factual or historical background not contained in your letter might
require a conclusion different from the one expressed herein. You have
represented that this opinion is not sought by a party to pending private
litigation concerning the issue addressed herein. You have also represented
that this opinion is not sought in connection with an investigation or litigation
between a client or firm and the Wage and Hour Division or the Department of
Labor.
Sincerely,
Barbara R. Relerford
Office of Enforcement Policy
Fair Labor Standards Team
Enclosures
Section 13(a)(15) of the
Fair Labor Standards Act
29 C.F.R. § 552.101
WH Opinion Letter February 9, 2001
WH Opinion Letter May 14, 2001
WH Opinion Letter November 25, 1975
* Note:
The actual name(s) was removed to preserve privacy in accordance with 5 U.S.C.
552 (b)(7).