PHInational.org

In a noon briefing at the White House, President Obama announced on December 15 that he intends to guarantee nearly 2 million home care workers basic minimum wage and overtime protections.

With a dozen home care aides and employers surrounding him, Obama reiterated his message that everyone in America “deserves a fair shake and a fair shot.”

Referring to the day during his 2008 campaign, when he “walked in the shoes” of home care aide Pauline Beck, Obama noted the critical importance of home care to frail elders and people with disabilities and the hard work it takes to get up at 5 a.m., spend the day caring for someone in need, and return home to care for one’s family.

Referring to the nation’s home care workforce, he said “We’re going to do what is fair and what is right.”

With President Obama at the White House was PHI Board member Karen Kulp. Kulp is president/CEO of the Philadelphia-based Home Care Associates (HCA) and was invited to the White House along with an HCA home care aide, Iterra Blackshirre.

Pennsylvania is one of 16 states that already guarantees minimum wage and overtime protections to home care workers.

“Giving home care workers the same basic federal labor protections that most workers enjoy is both the right thing to do and cost-effective,” Kulp said. “Recruiting and retaining home care workers has been a problem that has plagued the industry. Fair pay for home care workers improves the quality of the job and as a result improves care for our clients.”

The Proposed Rule

The administration plans to guarantee minimum wage and overtime protections for home care workers through a change to the regulations implementing the Fair Labor Standards Act (FLSA).

Right before the President’s announcement, the U.S. Department of Labor (DOL) posted its Notice of Proposed Rulemaking (pdf), which would narrow the interpretation of the current “companionship exemption” that has long excluded home care workers from wage and hour protections.

The new rule would limit the companionship exemption to workers who provide only “fellowship and protection.” All home care workers employed by third party employers would be covered by FLSA.

PHI President Steven Dawson responded to the proposed change, noting that “this Administration is sending a strong signal that it recognizes that ‘care work’ is not casual labor but instead one of the fastest-growing occupations in the nation.”

Next Steps

The proposed rule is expected to be published in the Federal Register on December 19. The 60-day public comment period will begin on that date.

“We will be encouraging our constituents to send comments to the Department of Labor,” said Steve Edelstein, PHI national policy director. “It is essential that DOL hear from those affected by this change.”

Following the comment period, DOL will review the comments and possibly revise the rule in response. DOL would then issue a final rule, most likely in spring 2012.

To stay informed and learn how to submit comments in the coming weeks, join the PHI Campaign for Fair Pay.

To learn more about the home care workforce, go to: www.phinational.org/homecarefacts.

– by Karen Kahn

On behalf of the 2.3 million home care and personal assistance workers who are excluded from the basic federal wage and overtime protections afforded to most workers in this nation — and Evelyn Coke, who was denied overtime pay and took her case all the way to the Supreme Court — PHI commends Department of Labor Secretary Hilda Solis for proposing revised regulations to the companionship exemption under the Fair Labor Standards Act. We wish Ms. Coke had lived to see this day.

We also praise President Obama for his support of the Secretary’s proposal. By announcing these revised regulations at the White House, this Administration is sending a strong signal that it recognizes that “care work” is not casual labor but instead one of the fastest-growing occupations in the nation.

Narrowing the companionship exemption is both fair and smart.

The home care industry has changed dramatically in the last three-and-a-half decades. Today home care is a multi-billion dollar industry that employs the largest and fastest-growing workforce in our economy.

The proposed revisions (pdf) are a long overdue acknowledgment that home care workers, who provide long-term care and support for our nation’s elders and people living with disabilities, play a crucial role in supporting America’s families and businesses, so that family caregivers can go to work with the peace of mind of knowing that their loved ones are getting the care they need in the setting of their choice — their homes.

By establishing basic labor protections for home care workers, this Administration is making clear that it values these jobs and recognizes their importance to the future of our social infrastructure, our health care system, and our economy. Narrowing the companionship exemption is a very important first step to preparing America to care.

Steven Dawson
President, PHI

For more information about the home care workforce, download Caring in America — A Comprehensive Analysis of the Nation’s Fastest-Growing Jobs: Home Health and Personal Care Aides, a PHI report that uses the best data and research available today to present the most complete picture of the home care workforce possible.

A superior court judge ruled on Dec. 2 that Washington State owes in-home caregivers nearly $100 million in back pay and interest.

The ruling could affect as many as 22,000 caregivers there, including home-care workers and paid family caregivers.

The workers filed a class action lawsuit against the state following its 2003 decision to reduce Medicaid payments by 15 percent to recipients who use live-in caregivers.

A 2007 State Supreme Court decision overturned the payment reduction, but did not compensate caregivers for the four years of lost earnings.

On Dec. 2, Superior Court Judge Thomas McPhee ruled that the state still had to pay caregivers a total of $95.6 million in back pay and interest for those four years.

The state plans to appeal McPhee’s decision.

– by Matthew Ozga

The average private-pay rates for home health aides remained $21 for the third straight year, even as the overall cost of long-term care continues to rise in the U.S., according to a newly released study.

Meanwhile, adult day service centers, which employ direct-care workers, saw their daily cost-of-care rate increase slightly to $70, from $67 in 2010.

The study was published last month by MetLife Mature Market Institute, the research wing of the insurance company.

Only about half of the cost of home health aide services actually goes to the aide herself. According to PHI research, the median hourly wage for home health aides was $9.85 in 2009, the last year for which data are available.

Long-Term Care Costs Rising Overall

MetLife’s study shows that, overall, the cost of obtaining long-term care in most settings continues to rise.

In 2011, the daily average rate for a private room in a nursing home increased by 4.4 percent, to $239. In assisted living communities, meanwhile, the average monthly rate rose to $3,477, an increase of 5.6 percent.

The CLASS Program, a voluntary long-term care insurance program that was passed as part of the Affordable Care Act, was created to help people pay for the skyrocketing costs of long-term care.

However, the Obama administration could not demonstrate that the program would be financially solvent. While advocates continue to press for the program, its future remains uncertain.

A separate MetLife survey on the “retirement income IQ” of pre-retirees (aged 56-65) found that many are misinformed about how they will be paying for long-term care: 42 percent of respondents incorrectly believe that such care is covered by health insurance, Medicare, or disability insurance.

– by Matthew Ozga

On November 3, the Office of Management and Budget (OMB) announced that it had accepted for review proposed regulations from the Department of Labor (DOL) addressing the companionship exemption to the Fair Labor Standards Act (FLSA).

Currently, the companionship exemption excludes home care workers from FLSA overtime-pay and minimum-wage requirements.

PHI’s Campaign for Fair Pay calls for the OMB and DOL to issue new regulations revising the exemption to allow home care workers receive those basic wage protections.

In recent weeks, the Senate Committee on Health, Education, Labor and Pensions and a group of more than 40 economists and other researchers have separately urged the DOL and OMB to move ahead with new proposed regulations revising the companionship exemption.

– by Matthew Ozga

Economists, social scientists, and policy researchers from more than 40 universities and organizations sent a letter to U.S. Department of Labor (DOL) Secretary Hilda Solis and Director of the Office of Management and Budget (OMB) Jacob Lew urging them to extend minimum wage and overtime protections to home care workers under the Fair Labor Standards Act (FLSA).

The Economic Policy Institute, the Center for Economic and Policy Research, and PHI were among the organizations that signed on to the letter.

The October 28 letter (pdf) lists some of the benefits of narrowing the companionship exemption to its original purpose, which was to exclude casual eldercare companions from FLSA protections:

Dean Baker

• modest improvements in the earnings and working conditions of home care workers;
• long-run improvements in the quantity, quality, and reliability of labor supply; and
• reduced turnover among workers, with concomitant reduction of transaction costs to employers and improved continuity of care to clients and consumers.

“Home care workers should get the same protections as any other worker in the country,” said Dean Baker, co-director of the Center for Economic and Policy Research, who signed onto the letter.

“It’s a fairly simple issue: why would you single out a group of workers to not get what everyone else has?” he said.

Nancy Folbre, an economics professor at the University of Massachusetts, Amherst who also signed the letter, recently blogged about the “outmoded” companionship exemption in “The Depreciation of Care at Home,” in The New York Times.

DOL Developing Revised Regulations

DOL hosted two listening sessions on the companionship exemption this summer and has said that it is in the process of developing revised regulations.

PHI — along with the National Employment Law Project, SEIU, AFSCME, and the Direct Care Alliance — have been calling on DOL to revise its regulations to the companionship exemption to end the exclusion of 1.7 million home care workers from basic labor protections.

Visit PHI’s Campaign for Fair Pay to learn more about the “companionship exemption” and how to contact DOL and OMB and signal your support for revising the companionship exemption.

– by Gail MacInnes, PHI National Policy Analyst