Advocates press to extend minimum wage for home care workers

Labor advocates are pressing the Obama administration to approve a rule, delayed at the White House for over six months, which would extend the federal minimum wage and overtime pay to home care workers.

The Fair Labor Standards Act was passed 75 years ago on Tuesday, bringing with it the 40-hour work week and minimum wage laws.

But up to 2.5 million home care workers who help the elderly and people with disabilities bathe, eat and take care of themselves are not guaranteed a minimum wage or overtime benefits, according to a provision of the law.

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Worker advocates say that's a loophole that needs to be close.

"It's 2.5 million workers and there's no reason why we shouldn't be paying them minimum wage and overtime," said Catherine Ruckelshaus, legal co-director at the National Employment Law Project. "It's an important sector and as we age and have a higher need for them we want to be able to have them have a stable workforce."

The exemption was originally set in 1974 and meant to cover babysitters and people who sit with the elderly, not full-time home care.

"As the home care business has changed over the years, the law hasn't changed to keep up," Vice President Biden said on Tuesday at an event marking the labor act’s anniversary. Biden said he hired a home care worker to help his mother.

Since January, however, the final draft of a Labor Department rule to close that loophole has been sitting at a White House office that oversees new regulations, well past the 120-day review period it was supposed to receive.

Advocates have a hard time explaining the delay.

"It seems to us that it's become a political decision about who can the administration try to accommodate," said Ruckelshaus.

She hoped that the anniversary of the labor law would highlight the importance of the rule.

Biden did not address the regulation's delay, but noted that the administration was "now working to finalize the rule."

Opponents worry that the rule could make home companionship more expensive, reduce jobs and increase costs to state Medicaid programs, which cover the service.

"I and others were afraid it would have the effect of increasing the cost of in-home companionship, which is paid by Medicaid," said Sen. Lamar Alexander (Tenn.), the top Republican on the Senate Health, Education, Labor and Pensions committee, during a hearing on Tuesday.

Acting Labor Secretary Seth Harris told lawmakers that the department has been "as deeply engaged as we think we can be" with state and federal Medicaid offices.

The total effect of the rule will depend on how employers respond, though the Labor Department has estimated that higher wages and overtime pay could cost employers as much as $182 million in the first year.

Former President Clinton attempted to close the loophole, but the Labor Department withdrew the proposal after former President George W. Bush came into office.

The Obama administration re-proposed the rule in 2011.

"Look, it’s an example of a basic question of economic growth and fairness," Biden said. "Shouldn’t someone working 40 hours a week be able to make a wage that’s above the poverty level?”