Obama OKs Wage Rule, Changes Landscape for Home Health Workers

Home care workers will now benefit from minimum wage and overtime protections following the announcement of a long-awaited rule—what some call a “victory” that has been two years in the making for the nation’s fastest-growing job force.

Two years after President Obama pledged his “We Can’t Wait” program, the U.S. Department of Labor announced today a final rule that will provide minimum wage and overtime protections to most of the nation’s workers who provide essential home care assistance to elderly people and people with illness, injuries and disabilities. Yet some home care and hospice providers expressed concern over the implications for businesses, employes and those receiving care.

Beginning January 1, 2015, nearly two million direct care workers will be covered under the Fair Labor Standards Act, leading to a more a stable workforce, industry members and officials say.

“Today we are taking an important step toward guaranteeing that these professionals receive the wage protections they deserve while protecting the right of individuals to live at home,” said Secretary of Labor Thomas E. Perez.

The final rule also clarifies that direct care workers who perform medically-related services for which training is typically a prerequisite are not companionship workers and therefore are entitled to minimum wage and overtime protections.

“Direct care workers play a critical role in ensuring access to high-quality home care that many people need in order to remain healthy and independent in their communities, and they should be compensated fairly for this important work,” said Secretary of Health and Human Services Kathleen Sebelius. “We will continue to engage with consumers, states, advocates and home care providers in the implementation of this rule to help people with disabilities, older adults and their families receive quality, person-centered services.”

Home care and hospice organizations represented by the National Association for Home Care and Hospice, however, expressed concerns over the implications of the new rule and its potential impact on businesses that employ caregivers as well as those who receive their care.

“Like many things that emanate from Washington, the repeal of the companionship exemption is not what it seems. While ostensibly intended to help hard working caregivers, it will have the very opposite effect,” said Andrea L. Devoti, Chairman of the National Association for Home Care & Hospice in a statement. “Also, according to the advocates for persons with disabilities, it will trigger great harm to many of this nation’s most vulnerable citizens.”

Companies will likely shift caregivers from full time to part time positions as a result to keep costs to consumers down, NAHC continued.

“It will mean that people will receive less care,” Devoti said. “Home care companies will have little choice but to employ workers part time rather than full time as Medicaid payment rates and consumers with limited incomes cannot afford higher costs. Caregivers will in the end receive less pay.”

There are an estimated 1.9 million direct care workers in the U.S., with nearly all currently employed by home care agencies, according to the Department of Labor. Of these care providers, approximately 90% are female, and nearly 50% are minorities.

As the home care workforce constitutes the fastest-growing job force in the nation—projected to increase 70% over the course of this current decade—America will need an estimated 4 million home care aides to meet the support needs of its aging population, according to the Paraprofessional Healthcare Institute (PHI).

“This is a tremendous victory for home care aides, a workforce earning near-poverty wages while providing vital personal care and health-realted services to America’s elders and people living with disabilities,” said the Paraprofessional Healthcare Institute (PHI) in a statement. “We are pleased that the Obama administration has fulfilled its promise to treat home care workers with respect and fairness.”

Written by Jason Oliva