Since 1975, home- and community-based care workers have been subject to classification as “companions” by the Department of Labor (DOL), a policy that exempts their employers from the federal minimum wage and overtime standards established in the Fair Labor Standards Act.
The 25 member organizations of the Eldercare Workforce Alliance (EWA) believe this policy should change and have sent a letter (pdf) to DOL Secretary Hilda Solis and HHS Secretary Kathleen Sebelius urging them to reconsider the “companionship exemption” in light of the imminent crisis in health care due to changing home-care requirements and a rapidly aging population.
EWA’s letter is the latest in an ongoing call to change the exemption policy. In 2007, PHI Director of Policy Research Dorie Seavey testified before Congress in favor of the Fair Home Health Care Act, a bill that would extend federal wage and hour protection to home care aides.
Last January a New York Times editorial called attention to the unfortunate contrast between the rapidly burgeoning eldercare sector and the fact that this sector ranks as “one of the lowest paid and most exploitable” in the entire health care industry –- largely due to the “outdated” companionship exemption policy.
The recent EWA letter continues the call for change and offers specific recommendations about how DOL ought to proceed in revising the rules, including:
- seek input from key stakeholders to help shape the definitions and manner in which the companionship exemption might be amended.
- consider the impact of any potential changes on consumer-directed programs to avoid any unintended consequences.
- collaborate with HHS to find ways that the latter can give guidance to states on managing any resulting increase in the cost of providing home care services.
- grant a time-limited grace period for states, home-care delivery systems, and employers to adjust to the extension of minimum wage and overtime protection to home care workers.
Nancy Lundebjerg, co-convener of the EWA and deputy executive vice president of the American Geriatrics Society, says a reworking of DOL’s policy to extend federal protections to home-care workers will produce more than one beneficial effect.
According to the DOL’s own figures, she says, the eldercare industry employs millions of people and is experiencing faster growth than any other sector of the health care industry. “The Alliance believes that an important part of improving the quality of care is ensuring the recruitment and retention of a quality workforce, which includes paying adequate wages to home care and other eldercare workers,” she says. Additionally, “Strengthening home care occupations can also drive long-term economic growth, particularly within low-income communities.”
More on labor standards and the companionship exclusion:
- PHI’s Nov. 2008 letter to Obama Administration (pdf)
- Text of the Fair Home Health Care Act (pdf)
- Testimony (pdf) offered at an Oct. 25, 2007 hearing
- PHI’s Fair Home Health Care Act analysis (pdf)
Interested parties should tread carefully with revising the federal companion exemption.
The social purpose of the exemption is to keep care affordable for the consumer. As such, it is an exemption to the complex state and federal rules for minimum wage and overtime.
In California, all workers, including home care workers, must be paid the minimum wage of $8.00 per hour. All home care workers must be paid overtime over eight hours per day and 40 hours per week. The only exemption is for personal attendants.
If the personal attendant exemption was removed, a personal attendant working a 24 hour shift was have to be paid $304 rather than the current $192. If the exemption was removed, most companies would staff the case with three 8 hour shifts. The unintended consequence would be that the worker currently receiving $192 for a 24 hour shift would now receive $64 for an eight hour shift. I doubt they would feel better off.