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DOL Extends Minimum Wage, Overtime to Home Health Workers
Critics charge move will make home care unaffordable to those who need it most

By Stephen Miller, CEBS  9/18/2013

updated 9/20/2013

The U.S. Department of Labor (DOL) has put forth a final rule extending the Fair Labor Standards Act’s minimum-wage and overtime requirements to most of the nation’s workers who provide home care assistance to elderly people and those with illnesses, injuries or disabilities. Announced on Sept. 17, 2013, the rule will not take effect until January 2015.

“Many American families rely on the vital services provided by direct-care workers,” Secretary of Labor Thomas E. Perez said in a news statement. “Today we are taking an important step toward guaranteeing that these professionals receive the wage protections they deserve.”

Critics charged that the new rule will make home health care unaffordable to many of those who are most in need of these services, including the elderly and disabled. 

ADAPT, an advocacy organization for people with disabilities, issued a statement urging the administration to reconsider its action, saying: The U.S. Department of Labor developed and published these rules without input from the disability community, even though President Obama had issued an Executive Order (13563) that instructed federal agencies to engage all stakeholders before issuing proposed rules. … If President Obama, Secretary Perez and the Obama administration truly support the disability community and believe in keeping campaign promises, they will delay these rules and formalize the process begun by ADAPT and SEIU [the Service Employees International Union] to find common ground between the disability community and organized labor. … We have only ever wanted to be fully included in decisions that affect our lives and worked toward that end. Instead of being given a seat at the table, we have had a door slammed in our face.”

“These new regulations will drastically change the home care industry to the detriment of small businesses, patient comfort and worker wages,” warned Susan Eckerly, senior vice president of the National Federation of Independent Business. “Requiring overtime pay threatens to put the small firms that provide companion care out of business and jeopardizes the level of care their clients currently enjoy.”  Moreover, DOL has effectively mandated home care providers work in shorter shifts with reduced hours. At the same time, those who rely on these services can expect less personal care coupled with significantly rising prices.”

The home health care industry has grown dramatically over the past several decades as more Americans choose to receive long-term care at home, instead of in nursing homes or other facilities. There are an estimated 1.9 million direct-care workers in the U.S.

Overtime Hours Add Up

Beginning in January 2015, those employing home health aides will be required to pay the federal minimum wage and overtime pay. The federal minimum wage is $7.25 an hour, though many states have their own minimum-wage laws mandating higher rates.

Under federal overtime-pay rules, workers must be paid at a rate of not less than one and one-half times their regular pay rate after 40 hours of work in a workweek. Many home health aides provide live-in services, and overnight and weekend hours could result in their receiving substantial amounts of overtime pay.

In addition, those employing home health aides will have to keep basic employee time and pay records, including the hours each employee works.

“Home care workers, who feed, clothe and bathe their clients while giving them medical care—sometimes around-the-clock—have been left out of [the FLSA’s] basic labor rights,” such as overtime, ThinkProgress, a liberal advocacy group, noted in a posting after the DOL’s announcement. “Home health and personal care aides make just $9.70 at the median, or $20,170 a year. Many make too little to get by.”

The group also noted that women and people of color disproportionately make up the home care workforce...making the rule change an important gender and racial justice issue.”

However, home health care providers have raised alarms about the effects of increased costs, particularly regarding overtime. “Since Medicare and Medicaid payments do not allow for overtime, multiple caregivers will need to be assigned to care for patients that have extended needs,” Andy Carter, president and CEO of the Visiting Nurse Associations of America, said in comments submitted to the DOL last year. “The emotional stress on patients and the burden on families to orient to new rotations of staff cannot be overstated.”

Moreover, enforcing the rule will have “unintended outcomes for patients and families who do not have the resources to pay for overtime care for trained staff,” Carter added. “First, patients and their families may reject needed care altogether. Second, other patients will turn to the ‘gray market’ of untrained personnel. Both unintended consequences will compromise the safety and quality of care. In addition, patients, because of safety concerns or a relapse, may be forced to move to a more intense level of care, such as a nursing home, at greater costs to patients and government payers.”

Companion Services Exempted

The final rule clarifies that direct-care workers who perform medically related services for which training is typically a prerequisite are entitled to the minimum wage and overtime. Individuals who are employed only by the person receiving services or that person’s family or household and are engaged primarily in fellowship and protection (providing company, visiting or engaging in hobbies) or care incidental to such activities will still be considered exempt from the FLSA’s minimum-wage and overtime protections. Critics contend that many home companions provide some health-related services and that the ambiguity between the two roles will result in costly litigation.

The Department of Labor has created a new web portal with interactive Web tools, fact sheets and other materials to help families, employers and workers understand the new requirements.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

Related External Link:

Obama Administration Decrees Overtime for Home Health Companions, Cato Institute blog, September 2013

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