When Franklin Delano Roosevelt signed the Fair Labor Standards Act (FLSA) into law 75 years ago this week, he probably didn’t envision how the law would impact the burgeoning service lines of today’s senior care industry—and millions of in-home care workers.
The FLSA’s “companionship services exemption,” added in 1974, placed those who serve as companions for older or frail people in the same basic category as babysitters and excluded them from protections under the law concerning wages or work hours. The changing roles of home-based care delivery have fueled outrage at the minimum wage portion of the exemption, although some groups believe that allowing home caregivers to charge overtime will be detrimental to both caregivers and the elderly they serve.
In December 2011, the Obama Administration announced a proposal to change the companionship exemption and allow home care workers the same protections that other workers enjoy, ensuring minimum wages and limits on forced overtime. “Due to significant changes in the home health care industry over the last 35 years, workers who today provide in-home care to individuals are performing duties and working in circumstances that are markedly different than when the companionship services regulations were first promulgated,” according to the Department of Labor website FAQ on the proposed changes. “The nature of the employment relationship and the scope of duties being performed by workers in the home are different than originally contemplated when the exemption was first enacted.”
The proposed changes got as far as the Office of Management and Budget, which was to review the rule by April 15. As of late June, no action has yet been taken.
The Eldercare Workforce Alliance, a coalition of 28 national organizations, is especially concerned about the effects of the exclusion on the nearly 2.3 million home- and community-based workers caring for the country’s elderly. “We feel that home care workers are integral members of the interdisciplinary care team,” explains David Baily, project coordinator of the alliance.“They provide essential care, services, and support to older adults. However, often times poor working conditions, inadequate wages, benefits and training, as well as high turn-over make it a challenge to meet the increasing demand for care and services for older adults.”
Personal Care Aides (PCAs) often make less than $10 an hour, especially in the deep South, according to May 2012 data from the Bureau of Labor Statistics. Most PCAs are women, and many of them don’t have health insurance themselves, noted then-Department of Labor Secretary Hilda Solis in a blog.
Not leveling the playing field in the home care work sector could have major impact on the eldercare workforce,Baily says.“As our nation ages, direct care workers—who are currently responsible for providing 70 to 80 percent of the paid hands-on long-term care for older adults—will be critical to providing quality care. Already the U.S. is dealing with an acute shortage of direct-care workers, a shortage that will only worsen over the next 20 years as millions of Americans will need long-term care.”
Other groups, including the Private Care Association, think repealing the restrictions on overtime will do caregivers more harm than good by making it more expensive for seniors to hire them. “Imposing overtime pay could cost seniors and the disabled $10,000 more annually, which could force many into institutions, further pressuring federal programs Medicare and Medicaid,” notes a position statementon the organization’s website. “A caregiver who works 60 hours weekly with a client may find that cut to 36 hours to avoid overtime, and must make up the difference with multiple clients, costing more in transportation and time.”
The waters become muddier when state labor laws are put into the mix: The Home Care Association of New York State, also against changing the exemption rules, adds, “While the FLSA provides a federal companionship exemption, New York State labor regulations separately require agencies to pay minimum wages and pay overtime at time-and-a-half of minimum wage. The proposed elimination of this federal exemption would mean that agencies in New York would be mandated to pay overtime to their aides at time-and-a-half of the aide’s regular wage, rather than time-and-a-half of minimum wage.”
No decision is likely to please everyone, but few could find fault with implementing a minimum wage protection. However, 21 states and the District of Columbia already guarantee minimum wages to some home care workers under state law, the DOL notes. The overtime clause remains a serious concern to home care agencies, who will likely have to change staffing schedules and policies among their own employees.