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Home care industry pushes back against proposed labor protections
New regulations requiring home care workers to get minimum wage and overtime pay would hurt seniors through its negative impact on more than 4,000 businesses and nearly 340,000 companion care workers, according to a new report prepared for the International Franchise Association.
The Department of Labor announced its intent to revisit home care workers' exemption from the Fair Labor Standards Act late last year. Public comments are due by March 12.
"This is a solution to a problem that does not exist and will only harm those who need companion care the most, our nation's seniors," association President & CEO Steve Caldeira said in a statement accompanying the release of the report. "By requiring overtime pay for companion care workers, the Department of Labor is continuing its track record of imposing costly, burdensome and unnecessary regulations at a time when an increasing number of seniors are enjoying companion care as a cost-effective alternative to traditional care."
• The average amount of overtime worked by companion care employees in 542 surveyed franchise agencies is three times greater than the Labor Department's estimate;
• The department understates other costs, such as not considering additional management costs for adding staff to avoid the cost of paying overtime;
• The department "greatly underestimated" the impact of price increases on customers; and
• Companion care agencies expect that almost a quarter (23 percent) of their clients will be forced to switch to institutional care or "underground services" from unlicensed providers if the new regulations go into effect.
Proponents of the labor protections say the current exemption from labor standards was adopted in 1974, at a time when the home care workforce — mostly family members and neighbors looking after the elderly — was much different than the professional workers who do the job today.
"The workers that are employed by in-home care staffing agencies are not the workers that Congress envisioned when it enacted the companionship exemption … but instead are professional caregivers entitled to FLSA protections," the Department of Labor said when it announced its decision to revisit the regulations. "In view of these changes, the Department believes it is appropriate to reconsider whether the scope of the regulations are now too broad and not in harmony with congressional intent."
The report was criticized by the Paraprofessional Healthcare Institute (PHI), whose own research concludes that fewer than 10 percent of home care aides report working overtime.
"Critics of the proposed rule claim that home care providers can't absorb the added financial burden of overtime and travel time pay for their aides, arguing that home care workers should remain exempted from basic labor protections," states a PHI report released last month. "But all indications are that the home care industry is thriving and can afford the cost of these basic workforce protections. The industry's robust financial status stands in sharp contrast to the fact that half of home care workers earn so little that they must rely on public benefits."
PHI has also launched a petition urging the Department of Labor to take action.
Correction: This article was updated at 1:30 p.m. to reflect a two-week extension in the comment period and add comment from PHI.
