Proposed Wage Rights for Home Care Workers Triggers New Round of Debate

January 19, 2012

The U.S. Department of Labor has, at long last, moved to close an egregious loophole in its Fair Labor Standards Act rules — the exemption of home care workers from federal minimum wage and overtime pay requirements.

As I wrote some time ago, the exemption reflects an over-broad interpretation of a carve-out Congress made when it extended minimum wage and overtime rights to domestic workers.

That was nearly 37 years ago. So one could say the Labor Department has decided to rectify a long-standing error.

The department itself puts a somewhat different spin on its initiative. Says that home care workers today perform duties and in circumstances that weren’t envisioned when the current regulations were issued.

In any event, it’s issued a Notice of Proposed Rulemaking — the formal step all federal agencies must take before revising their regulations. Anyone who cares to may file comments on the proposed rule up to February 27.

And you’d better bet there will be comments. Here’s a preview of what I think we’ll see.

Support for the Rule Change

Proponents of the rule change will include organized labor and other nonprofits that advocate for low-wage workers, including home care workers specifically.

They’ll argue, as they have for some time, that home care workers deserve the proposed wage protections as “a matter of basic justice.”

They’ll note, as does the Labor Department, that home care is one of our country’s fastest growing industries. According to its projections, the number of home care aides will have nearly doubled by 2018 — from about 1.7 million to well over 2.5 million.

In short, we’ve got a large and growing group of skilled workers who are currently classified as occasional babysitters for adults.

This is bad for them — not least because it depresses their earnings to the point that some 46% live in households poor enough to qualify for public benefits like food stamps and Medicaid.

Also bad for all of us who want our loved ones — and ourselves, should the need arise — to be cared for professionally and, well, caringly.

Not surprising then to find AARP supporting the core thrust of the rule change on behalf of the older Americans it represents.

Objections to the Rule Change

We’re likely to see formal objections from some, though not all, home care agencies and the associations they belong to.

We’ve already heard from this quarter. And the concerns they raise go to the heart of the debate. It’s not the minimum wage requirement they’re so fussed about. It’s the overtime.

Home care workers already make, on average, $9.25 an hour — a very low wage for what they do, but not one that would be bumped up by coverage under the federal minimum wage rule.

But they’re entitled to overtime in only 16 states.

So for a great many, the wage stays flat, even if they spend far more than 40 hours a week actively tending to clients’ needs. And they often get no pay at all for the time they spend traveling from one client’s home to the next.

Some opponents of the rule change purport to have their interests at heart. Laurie Edwards-Tate, for example, warns that home care workers will earn less because agencies like hers will cut hours back to eight-hour shifts.

Also warns that thousands will be put out of work. The thought here seems to be that agencies will shrink or fold because third-party payers won’t increase reimbursement rates to cover the overtime costs.

But opponents, including Edwards-Tate, focus mostly on harms to seniors and others with disabilities.

“The cost of overtime especially will make in-home non-medical care unaffordable for many, if not most, of the seniors and persons with disabilities we serve,” she says. Dire consequences predicted, including costly, taxpayer-funded institutional care and risks of elder abuse.

“The companionship exemption is a significant factor in helping to keep paid, senior caregiving affordable,” says another home care company president. It “helps seniors protect their assets while receiving the right amount of care.”

This isn’t, I think, an entirely self-serving argument.

Mandatory overtime compensation could increase home care costs, though the Labor Department thinks it’s likely that employers will adjust shifts to eliminate or at least minimize the extra hours.

The first scenario could create more home care jobs, though perhaps also reduce wages for workers who are currently putting in as many as 80 hours a week.

The second would drive up home care costs and/or the already high costs of long-term care insurance. By how much is purely speculative.

For some low-income people, mandatory overtime could mean loss of Medicaid-funded home care — either because states that haven’t had to deal with overtime decide to scale back services or because they won’t reimburse for the additional costs.

In the latter case, agencies refuse to serve Medicaid beneficiaries, as some doctors already do.

Still, I think it’s fundamentally wrong to exclude home care workers from basic labor protections because we’ve got an unresolved — and growing — social problem.

We might as well say the affordable housing shortage justifies exempting construction workers from the minimum wage.


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