PHInational.org

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

The 60-day public comment period on the U.S. Department of Labor‘s (DOL) proposed rule to revise the “companionship exemption” has hit the midpoint.

Since the DOL launched the comment period in late December, critics of the proposed regulations have made numerous assertions regarding the negative impact of providing minimum wage and time-and-a-half pay for overtime for home care aides.

Concerned that these assertions exaggerate the costs associated with the rule change, PHI has released “Fixing the Companionship Exemption: Myths and Facts” (pdf), the fourth fact sheet in the Value the Care series on how narrowing the companionship exemption would affect home care workers, consumers, and employers.

Setting it Straight

The fact sheet sets straight an array of misconceptions, including how revising the companionship exemption would affect workers’ hours, costs for consumers and employers, and quality of care.

For example, the fact sheet tackles the myth that home come workers’ hours will be reduced because employers will limit work weeks to 40 hours rather than pay a worker time and a half.

In fact, less than 10 percent of aides regularly work more than 40 hours a week. Nearly half of home care workers work only part time, and 40 percent of these aides would like to work more hours. Though some aides who are working very long hours may be affected by the change, the good news is that more aides may be able to increase their hours.

FAQs

Additionally, to help address commonly asked questions about the companionship exemption, the National Employment Law Project (NELP) updated its Frequently Asked Questions (pdf) after the proposed regulations were released.

The new FAQ clarifies, for example, what group of workers would be affected by the proposed changes, the DOL’s proposed changes to the definition of companionship services, and how the proposed changes would improve conditions in the industry.

To submit an official comment to the DOL before the comment period ends on February 27, read sample comments, and see other resources, including the Value the Care series, visit the PHI Campaign for Fair Pay website.

– by Deane Beebe

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.

Oregon's state capitol building

Contract negotiations between Oregon and the union representing home care workers there have stalled over a state proposal to substantially raise the eligibility requirements for aides to receive health insurance.

A bargaining team led by Oregon Gov. John Kitzhaber (D) wants to require home care aides that provide Medicaid-covered services to low-income elders and people with disabilities to work 130 hours a month for three consecutive months in order to qualify for health benefits. Currently, aides must work 80 hours for three straight months.

The increase in hours would cause 2,000 of the state’s 12,000 home care aides to lose their benefits, according to the Service Employees International Union (SEIU), which represents the aides.

In late December, negotiations between the state and the union reached an impasse, largely because of the insurance issue. Discussions between the two sides will re-open next month.

On January 18, a group of about 100 home care workers staged a protest against the cuts in Kitzhaber’s office.

The governor said that he respected home care workers and collective bargaining rights in general. “We will try to do all we can,” he said.

Budget Woes Cited

Kitzhaber’s bargaining team says that the cuts to home care workers’ benefits are necessary to help close a $300 million budget gap.

Oregon’s in-home care program has been the target of cuts before. On Jan. 1, home care workers saw their hours reduced by 5 percent, a move that saved the state $4 million.

But the SEIU and AARP Oregon say that the newly proposed benefits cuts go too far. The organizations have launched a media campaign asking Oregonians to speak out against the proposed cuts.

“It is extremely disappointing that Gov. Kitzhaber and his team are attempting to reduce benefits for low-wage workers just to save the state a few million dollars,” said PHI Government Affairs Director Carol Regan.

“Beyond that, this is bad fiscal policy,” Regan added. “Reducing low-wage workers’ access to health care will result in higher Medicaid enrollment and put a greater strain on emergency medical care in Oregon. These cuts will simply shift costs, not lower them.”

– by Matthew Ozga

It has been over two weeks since the U.S. Department of Labor (DOL) launched the public comment period to provide people with the opportunity to express their opinion on its proposed rule to revise the “companionship exemption” in order to extend federal minimum wage and overtime protection to home care workers.

Hundreds of people have already weighed in to support — or oppose — the DOL proposal to give about 2 million home care workers the same basic federal labor protections afforded to most workers in the nation.

Some home care agency operators are strongly objecting to the prospect of having to pay home care workers a fair wage, including time and a half for overtime, as most businesses in America are required to do.

The reason? Home care operators have argued that paying fair wages to home care workers is not in the interest of home care aides or consumers.

Dispelling the Myths

Value the Care! No. 3 (pdf), a new PHI fact sheet in the series on revising the companionship exemption, explains that paying home care workers fair wages will not make care unaffordable for consumers and, in fact, could actually lower costs for some employers.

The fact sheet explains, for example, that:

• 21 states already mandate that home care workers be paid minimum wage; 16 of these states also require that some groups of home care workers have overtime protections.
• The vast majority of home care workers don’t work overtime.
• More than half of home care workers work part-time with many workers expressing the desire to work more hours.
• The cost of compliance would be minimal — according to the U.S. Department of Labor analysis, less than one-tenth of one percent of industry revenues.

Visit the PHI Campaign for Fair Pay website to read sample comments and submit an official comment to DOL before the comment period ends on February 27.

– by Deane Beebe

On December 27, just days after President Obama announced the U.S. Department of Labor‘s (DOL) proposed regulation to revise the “companionship exemption,” the 60-day public comment period was launched.

All stakeholders, including employers, workers, and consumers, are encouraged to weigh in on the proposed regulation before February 27. For more information, visit the PHI Campaign for Fair Pay for Home Care Workers.

The DOL’s proposed rule would narrow the “companionship exemption” under the Fair Labor Standards Act by clarifying the services that constitute companionship and by limiting the exemption to workers employed directly by households who provide primarily companionship services.

Home care aides who are employed by third parties such as home care agencies would be entitled to the same basic federal minimum wage and overtime protections afforded to most workers in the nation.

Editorial Boards and AARP Support Fair Pay for Home Care Workers

Several newspaper editorial boards, including those of the New York Times, Des Moines Register, and Chattanooga Times Free Press, have already come out in support of revising the decades-old regulation.

The companionship exemption regulation considers home care workers to be casual babysitters instead of an essential workforce that makes it possible for elders with chronic conditions and people with disabilities to live independently in their homes.

AARP Senior Attorney Stacy Canan and her colleagues also call for giving home care workers basic federal labor protections in “How the Fair Labor Standards Act Fails Home Health Aides and Consumers,” published in the Clearinghouse REVIEW Journal of Poverty Law in the November-December 2011 issue.

Canan and her colleagues write that, “Exemption from FLSA protections has severe negative consequences for home health care employees and consumers.” They conclude by cautioning that “the industry will remain unable to attract sufficient workers to meet exponentially growing demand without higher wages and overtime protections.”

New PHI Fact Sheet

A new PHI fact sheet, Value the Care, No. 2 (pdf), explains how fixing the companionship exemption will improve jobs, stabilize the rapidly growing home care workforce, and help the nation’s economy.

“FLSA protections are a win-win for America, helping millions of workers struggling in today’s economy while also ensuring quality support services to elders and people with disabilities in the years ahead,” the fact sheet states.

Highlights of News Coverage on the Companionship Exemption

• New York Times, “Wage Protection Planned for Home Care Workers,” December 15, 2011
• Los Angeles Times, “Obama Instating Labor Rules for Home Care Aides,” December 15, 2011
• Associated Press, “Plan Would Lift Wages of Home Care Workers,” December 15, 2011
• Kansas City Star, “Government Proposes New Rules to Protect the Pay of In-Home Care Workers,” December 15, 2011
• Healthcare Finance News, “Minimum Wage and Overtime Protection Proposed for Home Care Workers,” December 16, 2011
• Salt Lake Tribune, “Utah Home Health Care Workers May Get Pay Guarantee,” January 2, 2012

To send an e-comment to DOL about the proposed rule to revise the companionship exemption and learn more about the regulation, visit the PHI Campaign for Fair Pay for Home Care Workers.

– by Deane Beebe