PHI Statement Regarding Home Care Associations' Challenge to the U.S. Department of Labor Rule Extending Minimum Wage and Overtime Protections to Home Care Workers

Monday, December 22, 2014
Contact: 

Deane Beebe, PHI Media Relations Director; 646-285-1039

PHI is disappointed by today's federal district court ruling in Home Care Association of America, et al v. David Weil et al, in which several home care provider associations challenged the authority of the U.S. Department of Labor (DOL) to extend basic minimum wage and overtime protections to home care workers. These protections are set to go into effect on January 1.

The new DOL regulation, which the plaintiffs challenged, limits the number of home care workers subject to the "companionship exemption" by: a) narrowing the definition of "companionship" and b) excluding third-party employers from taking advantage of the companionship exemption and the exemption of "live-in domestic service workers" from overtime protections. Today's decision affects only the treatment of third-party employers.

The decision from the U.S. District Court for the District of Columbia allows home care agencies and other third party payers to continue to deny minimum wage and overtime compensation to home care workers who provide primarily "fellowship and protection" (as opposed to personal care). In addition, all home care workers employed by home care agencies and other third-party payers who provide services on a live-in basis would be exempt from overtime protections. The ruling, thus, allows this multibillion dollar industry to continue to profit from an exemption to our nation's most basic labor law, while perpetuating the exploitation of home care aides who provide vital services to millions of Americans.

The $90 billion home care industry has seen its revenues double over the last decade. Yet home care workers -- 90 percent of whom are women and a majority of whom are women of color -- earn poverty wages, which, when adjusted for inflation, have fallen by 5 percent over the last decade. With a median wage of $9.61 an hour, more than half of home care aides must rely on public benefits to support their families.

The DOL's changes to the Fair Labor Standards Act recognize the critical importance of the home care workforce to providing adequate supports for elders and people with disabilities in the community as well as the enormous impact home care jobs have on our economy. About 2 million home care aides bathe, dress, feed, and otherwise support growing numbers of elders and people with disabilities every day in homes across America. They shop, cook, and take their clients to medical and other appointments. And increasingly, these workers are being relied on to communicate with health care teams in order to reduce unnecessary hospitalizations and expensive rehabilitation. 

Home care occupations will add over 1 million new jobs to our economy in the decade 2012-2022, more than any other occupation. By comparison, the number of registered nurses will grow by only about half that number (527,000) during the same period.

As a nation, we cannot afford to consider these anything other than "real" jobs, deserving of the same basic labor protections that are afforded nearly every other American worker. Quality long-term services and supports depend on a well-trained, well-compensated, and stable workforce.

Today's federal district court ruling leaves in place the DOL's narrowed definition of companionship, which limits the application of the exemption to workers who provide fellowship and protection and spend less than 20 percent of their working hours on personal care. Since the work of most home care aides primarily entails providing personal care services, valid claims of exemption should be rare, in spite of the district court's decision. 

Unfortunately, the ruling will have a more significant impact on employees of home care agencies who live in their clients' homes, because third-party employers will continue to be able to claim the live-in exemption, which exempts live-in domestic workers from overtime protections.

As the Home Care Association of America v. David Weil lawsuit continues to proceed through the courts, PHI calls upon private home care employers and state Medicaid programs to embrace fair pay for home care workers -- making necessary adjustments in their programs and services to extend minimum wage and overtime protections to this essential workforce, thereby fortifying the quality services we all want for ourselves and our loved ones.

For more information on the U.S. Department of Labor home care rule, visit: www.PHInational.org/fairpay and www.dol.gov/whd/homecare/.

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