On July 13, 2018, the Department of Labor Wage and Hour Division (WHD) released Field Assistance Bulletin No. 2018-4 providing guidance on when caregiver registries are an “employer” of caregivers under the Fair Labor Standards Act (FLSA). Rather than providing in home care services directly, registries provide individuals, such as seniors and those with disabilities, support for finding in-home care by offering referrals of qualified pre-screened caregivers from their database. This may be nurses, home health aids, personal care attendants, or home care workers, however titled. For the past four decades, the WHD’s position has been that generally a registry, even one that performs payroll services, is not an employer under the FLSA; however, if the registry directs and controls the caregivers work and sets the rate of pay, it is an employer. However, regulation changes and requests for additional guidance promoted the WHD to pen the bulletin.

To determine whether a registry is an employer, the WHD engages in a fact-specific assessment of the relationship between the registry and the caregiver, known as the “economic reality” test. Field Assistance Bulletin 2018-4 identifies common practices of registry business practices and operations that the WHD may analyze when determining if an employment relationship exists. While the individual factors identified in the Field Assistance Bulletin are not dispositive, the factors are helpful for employers to identify business practices that may establish an employment relationship, therefore triggering obligations under the FLSA:

  • Conducting Background and Reference Checks
  • Hiring and Firing
  • Scheduling and Assigning Work
  • Controlling the Caregiver’s Work
  • Setting the Pay Rate
  • Receiving Payments of Caregiver Services
  • Paying Wages
  • Tracking Caregiver Hours
  • Purchasing Equipment and Supplies
  • Receiving EINs or 1099s

Notably, the WHD does not focus on a single factor, but rather looks at the “totality of the circumstances,” including the control and influence the registry has on the caregiver’s terms and conditions of employment.