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The U.S. Department of Labor (DOL) announced that the public now has until March 12 to comment on the proposed revisions to the “companionship exemption,” which would give home care workers federal minimum wage and overtime protections under the Fair Labor Standards Act.

The short extension should have no impact on the ability of the Department of Labor to issue final regulations by this summer.

Private Duty Franchises Fight Change

In a flurry of recent advocacy, the trade organizations for the rapidly growing private duty franchises have ratcheted up their opposition to the proposed regulations.

In a recent USA Today article, “High Turnover Affects Home Health Care Quality,” Gale Bohling, director of government relations for the National Private Duty Association, says that if home care workers are paid for working overtime they “will not be able to assist people they consider family.”

Showing his complete lack of respect for the millions of women who provide home care services, Bohling adds, “For them, this really isn’t a job; it’s a lifestyle.”

Catherine Ruckelshaus, legal co-director of the National Employment Law Project, which is supporting the rule change, notes in the same article that home care workers’ salaries are around “$16,000 a year. No one can live on that. I think we forget the broader picture here.”

Notably, Bohling fails to mention that, as a result of their poor wages, half of home care workers live in households that rely on public benefits.

In an MSNBC blog post, “Home Health Care Industry Fights Overtime Proposal,” PHI National Policy Director Steve Edelstein takes on the industry claims.

In the post, he argues that “the exemption was never really intended to apply to businesses like home care agencies, and it wasn’t supposed to apply to workers who were doing these jobs as a vocation. We just have to recognize that it’s a real job and pay for the services accordingly.”

Advocates Speak Out

PHI and its partners at the Caring Across Generations campaign have been advocating for the regulatory change in a variety of media outlets. The following commentaries appeared last week:

• Washington Times, “Home Care Workers Can Relieve the Stress of Caregiving“
• Huffington Post, “Looking Out for Homecare Workers, Looking Out for Our Future“
• New America Media, “Fair Pay for 25 Million Home Care Aides Facing Industry Opposition“

Submit a Comment

To submit an official comment, learn more, and read other coverage on the companionship exemption, visit the PHI Fair Pay for Home Care Workers site.

– by Deane Beebe

A new PHI fact sheet disproves the home care industry’s oft-repeated claim that it cannot afford to pay its workers time and a half for overtime hours without passing costs along to consumers.

Home Care Jobs: The Straight Facts on Hours Work (pdf), draws upon nationally representative surveys and statistics and finds that home care workers, on average, work between 31 and 34 hours a week.

The new fact sheet is the sixth installment in PHI’s Value the Care! series, which explains the potential impacts of the recent Department of Labor (DOL) proposal to extend minimum-wage and overtime protections to home care workers.

Home care companies say that they will have to raise service fees if the government forces them to pay workers extra for overtime. But the PHI fact sheet shows that the vast majority of home health and personal care aides (approximately 90 percent) do not even work enough hours to qualify for overtime pay.

“The claim that the added cost of paying overtime to home care workers will result in significantly increased costs to employers and/or consumers is not supported by the available statistical evidence,” the report states.

Inconsistent Hours a Bigger Issue

The PHI fact sheet also finds that nearly 60 percent of home care aides work on a part-time basis.

Increasing the workloads of part-time home care workers who want to work full-time is a “far more pressing issue” than anything the home care industry claims, the report says. It continues:

Current employment patterns for home care aides suggest that considerable capacity exists for rebalancing workloads across existing workers. Creating more balanced workloads will not only limit any increases in overtime costs for home care companies but will also minimize any recruitment costs associated with hiring new workers.

Enacting the proposed DOL rule change would spur employers to control costs by distributing hours more evenly among their workers, the report argues.

A newly published PHI report (pdf) examines three employers that have successfully used innovative methods to manage their workers’ hours — thereby controlling costs — while maintaining a high standard of care quality.

The government is accepting public comments on the DOL’s proposed rule change through February 27.

– by Matthew Ozga

The National Council of La Raza‘s (NCLA) February Latino Employment Report focuses on Latinos in the direct-care workforce and calls for revising the “companionship exemption” under the Fair Labor Standards Act in order to extend home care workers basic minimum wage and overtime protections.

“Caring for Caregivers: Latinos in the Direct-Care Workforce” (pdf) reports that 15.4 percent — about 520,000 people — of the approximately 3.4 million direct-care workers in the United States is Latino.

It states that 23 percent of the direct-care workforce is foreign-born — compared to 15.8 percent of the general employee population — and notes that Latinos constitute almost half of the foreign-born workers in the U.S.

Latinos are more likely to be employed as personal care aides (17.6 percent) than home health, nurse, or psychiatric aides (14.7 percent), according to the report.

The reason for the disparity, the researchers suggest, is that more formalized training is required for home health, nurse, and psychiatric aides. Nearly half (49 percent) of Latino adults who are foreign-born and 31.2 percent who are native-born do not have a high school diploma, making the training for these higher-paying jobs more challenging.

Benefits of Industry Growth Not Passed on to the Workforce

Today, home health aides and personal care aides are, respectively, the third and fourth fastest-growing occupations in the nation (pdf) and among the top five occupations creating the largest number of jobs.

With the rising population of baby boomers, it is projected that the direct-care service industry will grow by 58 percent over the next decade — one of the fastest-growing industries in the nation.

The Latino Employment Report says that “while the home care industry will continue to see high growth and increasing revenue, the benefits of this growth are not passed on to the workforce.”

In particular, the report concludes that the “companionship exemption,” which excludes these workers from federal minimum wage and overtime protections, has taken a “direct toll” on the wages of personal care and home health aides.

NCLA encourages providers, recipients, and advocates of direct care to comment in support of the U.S. Department of Labor‘s proposed rule to revise the companionship exemption.

– by Deane Beebe

A new PHI report examines how three home care companies have successfully managed to control their overtime costs while maintaining their reputation for high-quality care.

The report, Can Home Care Companies Manage Overtime Hours? Three Successful Models (pdf), discredits home care industry claims that the Obama Administration’s proposal to revise the companionship exemption to extend minimum wage and overtime protections to home care workers would dramatically increase agencies’ overtime costs, since any overtime worked by aides would have to be compensated at time and half.

“These real examples tell us that, once there is a financial incentive for home care companies to manage overtime hours, they won’t just stand still and let their businesses suffer but instead will adopt modern staffing and scheduling practices, just like the companies profiled in the report,” said PHI Director of Policy Research Dorie Seavey, co-author of the report.

Staffing and Scheduling Practices to Manage Overtime

The report reveals how three home care agencies with differing case loads, service areas, and business models — Community Care Systems in Illinois; Addus HealthCare, a nationwide company; and Cooperative Health Care Associates in New York City — have independently implemented similar staffing and scheduling practices to manage overtime.

The most notable practices for managing overtime by these companies are:

• Electronic timekeeping and scheduling that enable “real-time” monitoring of aide availability, workloads, and overtime.
• Designation of new aide positions specifically designed to pick up incidental hours due to call-outs, worker absences, or emergencies.
• Proactive scheduling to spread work hours more evenly across the agency’s available aides.
• Splitting high-hours cases into multiple shifts shared by two or three aides.

“Once one company figures out how to minimize its overtime costs by more efficient scheduling, the rest will either follow or go out of business. That’s how competitive markets work,” Seavey said.

Strong Evidence for Successful, Quality Home Care Businesses Despite Overtime Pay

The authors conclude that the experiences of these three home care companies offer strong evidence that it is possible to grow and run successful home care agencies that have reputations for high-quality care and pay overtime at time and a half. The three companies are operating in 20 states and pay overtime even when not required to do so.

By spreading hours more evenly across their workers, carefully monitoring their workforce data, and designating aide positions designed to pick up incidental hours, these companies manage their overtime so that it does not become a costly business expense that undermines business profitability.

The directors of two of the companies that had “high-hour” cases reported that they “believe that provider continuity that results in overtime work has drawbacks that can affect the quality of care received by the client, including aide fatigue and burn out.” These companies use scheduling guidelines to split high-hour cases between two consistent aides so that continuity of care for the client is maintained.

Nationally representative surveys show that less than 10 percent of aides report working more than 40 hours a week (pdf).

“The real problem for this workforce is not overtime but ‘involuntary’ part-time work, which means aides who are assigned part-time hours by their employers but would like to work more hours,” Seavey said.

Can Home Care Companies Manage Overtime Hours? Three Successful Models (pdf) was made possible with support from the Ford Foundation.

– by Deane Beebe

Articles in support of paying home care workers fairly have recently appeared in The New York Times and at MomsRising.org.

The New York Times

In “Fair Pay for Home Health Aides,” published on February 8 in The New York Times‘ “The New Old Age” blog, contributing writer Paula Span encourages readers to “weigh in” in support of the Obama Administration’s proposal to revise the “companionship exemption” in order to extend basic federal minimum wage and overtime protections to home care workers.

“These are demanding, poorly paid jobs with high injury rates and high turnover,” Span wrote. “If we don’t make them more attractive, will our aging nation be able to find the many additional home care workers we will need in the years ahead?”

MomsRising.org

PHI Vice President Jodi Sturgeon blogged about how home care workers deserve fair pay in “Home Care Workers Excluded from Federal Minimum Wage and Overtime Protections,” published at MomsRising.org on February 3.

“Often, the family caregivers who make it possible for their loved ones to remain independent — either at a distance, nearby, or living with their children — depend on home care workers to supplement their caregiving,” Sturgeon wrote. “It takes a team to help someone who is frail or struggling with one or more chronic diseases to remain in the home.”

For more information on the companionship exemption, visit the PHI Fair Pay for Home Care Workers site.

– by Deane Beebe

The thriving home care industry brought in roughly $84 billion in revenue in 2009, the last year for which data is available, according to a new PHI fact sheet.

Faced with a proposed federal rule that would require home care companies to pay workers a minimum wage and overtime pay, many home care companies have argued that they could not possibly comply without passing along costs to consumers.

But the PHI fact sheet, Value the Care No. 5 (pdf), demonstrates that these claims are unfounded. The home care industry has flourished in recent years, growing steadily even during the recession.

Total revenue climbed at a yearly rate of about 9 percent between 2001 and 2009, while the number of home care providers increased by 20 percent each year from 2001 to 2010.

Low Wages Persist

Despite their tremendous success, many home care companies continue to pay their workers poverty-level wages.

The median hourly wage for home care workers was just $9.40 in 2010. Nearly half had to rely on public assistance, such as food stamps to supplement their low wages and Medicaid for health care coverage.

Currently, the companionship exemption to the Fair Labor Standards Act allows home care companies to legally pay their workers less than minimum wage and deny them time-and-a-half overtime pay.

In December, however, President Obama announced a plan to revise the companionship exemption regulations so that the vast majority of home care workers would receive wage and hour protections under the Fair Labor Standards Act.

The public is invited to comment on the proposed rule. The comment period ends February 27.

– by Matthew Ozga