Karen Kulp
Karen Kulp, president and CEO, Home Care Associates, and PHI board member, explains that paying home care workers minimum wage and overtime is fair and smart.
I recently had the honor of traveling to Washington, D.C., to stand with President Barack Obama, Secretary of Labor Hilda Solis, and home care workers from across the country, as the President announced the proposed regulations to ensure that home care workers have minimum wage and overtime protections under the Fair Labor Standards Act.
The new regulations amend a law that dates back to 1974, which exempted employers from paying minimum wages and overtime for “casual babysitters” and “companions for the aged and infirm.”
Pennsylvania is one of 21 states (along with Washington, D.C.) that require employers to pay minimum wage, and among 16 of these states that also mandate paying overtime. This leaves 29 states — and nearly 1.4 million workers — without these basic labor protections.
I was asked to go the Washington in my role as president of Home Care Associates in Philadelphia, which has been in business since 1993. We have over 175 workers who provide services to people in their homes and other settings.
Kulp (L) with President Obama
We believe that that providing quality care requires creating a quality job. A quality job means providing appropriate training as well as decent wages and benefits. This not only makes sense because it is the right thing to do — we believe it is the smart thing to do.
Our experience is that in the long run, paying decent wages leads to greater investment by workers resulting in lower turnover rates and better quality of care.
More people are seeking home care for themselves or loved ones. Today there is greater competition to provide those services — from franchise businesses, providers who offer minimum wages but no benefits, and independent home care workers who are hired directly by consumers or their families for their services.
Home Care Associates has a workforce that is experienced and committed to doing this incredibly challenging and important work. It takes a special kind of person to do this work day in and out. Workers stay when their work is respected and adequately rewarded. At our company our aides average over four years on the job, which benefits the individuals for whom we care.
As a nation, it is time for us to recognize the valuable role that home care workers play in caring for our loved ones. Many of us would not be able to work to support our own families without the assistance of a home health aide.
The success of our company is proof that you can have a successful business and still pay workers decent wages and provide them with benefits. The need for quality workers will only increase in coming years. That is why we support these proposed regulations to assure that workers across the country receive fair pay for the critical services they provide.
How much of HCAs billing is reimbursed by governmental programs whether it be on a state or federal level? Do you often take on cases where the client pays privately but then you bill medicare for certain services being “provided” in addition to the private pay?
On your website, you advertise 24hr a day care. In certain states, if the exemption is lifted, a caregivers direct cost would be $368 per 24hr period unless you staff that case with 3 caregivers working 8 hour shifts in which case the agency cost would be $232 per 24 hour period. This is based off $8/hr as this is the minimum wage in Ca. Assuming you choose to use one employee to cover a 24 hr period, after your mark-up to cover expenses such as office and non productive staff, you are looking at charging your client $450-550 per day. Do you have an abundance of clients that can maintain this kind of expense?
One last question, by being an employee owned company, are your employees exempt from some of the protections you state you are pushing for?
The average senior cannot afford homecare. The average senior cannot even afford a decent assisted living community. Think of the financial ramifications this change will cause if we take this small percentage of seniors that can afford some sort of homecare and take that option away from them. There will be more admits to hospitals and ER, our skilled nursing facilities will certainly benefit from this change as there will be more admits on this level, though at the tax payers expense.
Finally, the caregivers that currently have the opportunity to work let’s say 60 hrs a week will be limited to 40 hrs a week because of the overtime expense. Using an hourly rate of $11/hr, that would reduce that caregivers earning opportunity from $660/week to $440 a week. Oh, but they could go out and get a second job working with a different company. And most likely end up working a day shift and an overnight shift.
People are so short sighted and tend to look at the short term outcome but life is like dominos. Sooner or later it will come around and then when the damage is done, people will sit there and scratch their heads wondering. Wake up and look at the whole picture, across the whole country!
Henri,
To be clear, the new rule does not require that overnight aides be paid for time when they are sleeping, presuming that they are able to sleep for an extended period of time without interruption (that is, the aide is not working during those hours).
The opportunity to work 60 hours is not really an “opportunity.” It is exploiting workers who are forced to work long hours because of insufficient pay. We hope that workloads will become more balanced under the new rules, allowing workers who are currently working only 20 to 25 hours to get more hours, and those working very long hours to perhaps only work 5 or 10 hours overtime, but to get paid time and a half for those extra hours. That is the law, and it should apply to home care workers in the same way it does to almost every other hourly worker in this country.
If this change goes into effect, are you going to allow your employees to work a significant amount of overtime?