Administration to extend minimum wage to home care workers

The Obama administration is planning to approve a rule this month that would ensure home care workers are paid the federal minimum wage and overtime.

The Department of Labor said in its spring itinerary for regulations that it expects to finalize a rule in July that would extend minimum pay standards and the 40-hour work week to home care workers. 

That would be a boon to an estimated 2.5 million people in the United States who are paid to help the elderly and people with disabilities manage everyday tasks.

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Unions have long pushed for changing the rule, which was set in 1974 and meant for babysitters and neighbors who sit with the elderly. Times have changed since then, with an entire industry springing up to provide home healthcare to the greying population.

Last month, Vice President Biden recalled using a home care worker to help his aging mother to call for changing the rule.

"As the home care business has changed over the years, the law hasn't changed to keep up," Biden said.

"Shouldn’t someone working 40 hours a week be able to make a wage that’s above the poverty level?”

Some advocates for the elderly and disabled have fought the rule, however, expressing concern that it could increase costs and lead families to institutionalize their loved ones.

Former President Clinton tried and failed to change the rule during his time in the White House.

The Obama administration revived the proposal in December 2011, and it has been under review at the White House since then.

Opponents have worried that closing the loophole could make the service prohibitively expensive and pass on costs to state Medicaid programs, which pay for the care.

The total cost of the rule would depend on how employers respond, but the higher wages and overtime could amount to as much as a $182 million increase in pay in the first year, according to a Labor Department estimate.