Perceptions vary on whether the Department of Labor’s (DOL) “companionship exemption” can be viewed as a positive stride for caregiver labor protections or a hindrance to the home health industry, according to panelists during a House Subcommittee on Workforce Protections hearing held Wednesday.
The highly contested “companionship exemption” announced by the DOL in September has been a focus of debate for several months as the home health industry grapples with the potential impacts the rule would have for business as well as the aging clientele they serve.
Industry trade organizations such as the National Association for Home Care & Hospice (NAHC) have opposed the rule as they contend that it threatens to limit the care services home health aides are able to provide, while also passing on increased costs to patients.
“The Department of Labor new rule, while likely well intentioned, was issued without any real appreciation or understanding of home care,” stated Lucy Andrews, vice chair at NAHC and owner of a small home care business in California, in her testimony during the hearing.
Specifically, the rule redefines “companionship services” to limit the application of home health services to “fellowship.”
“‘Fellowship’ is not care and does little or nothing to keep people our of nursing homes or higher acuity facilities,” Andrews said.
Not only would the rule limit the services home health caregivers could provide, but Andrews suggested it would also lead to significant costs in care costs and restrictions in overtime hours that would negatively impact workers’ overall compensation.
“If I restrict the employees’ working hours, they will be paid less than they get today,” said Andrews. “For example, a client who has 10 hours of care a day will either have to pay the overtime or have two caregivers dividing the 10 hours into two shifts. This decreases the hours each employee works and decreases the continuity of care clients are used to when paying privately for care services.”
Reducing employees’ base hourly wages to accommodate the overtime costs mandated under the rule would also likely lead to higher turnover in caregiving staff, Andrews suggested, thus increasing costs of recruitment and training of new employees.
“Our industry is already struggling with high turnover rates and a cut in pay puts us at the bottom of the list of desirable work,” she said. “Ultimately, it impacts access to the care that the increasing numbers of Baby Boomers and the disabled community rely on to stay at home.”
Others disagreed with the notions that the “companionship exemption,” instead suggesting the rule threatens nothing but the ability to recruit and retain a quality home care workforce, such as Karen Kulp, president and CEO of Home Care Associates.
Based in Philadelphia, Home Care Associates operates in one of the 15 states that already mandates minimum-wage and overtime protections. The company receives about 90% of its revenue from Medicaid and has 90% of its employees working full-time.
“I know firsthand that a successful home-care business can pay workers above minimum wage and comply with overtime protections and be profitable,” Kulp said.
The DOL estimates an average annual cost of $321.8 million of implementing its rule, a cost mostly impacted due to payment of overtime, and a fraction of the industry’s $93 billion in annual revenue, Kulp noted
“Let’s remember that this modest cost is hardly money down the drain, it’s a sorely needed investment of the hardworking women and men of the home care workforce who are caring for our elders and individuals with disabilities,” Kulp said.
Differences aside, there is a tremendous need for in-home caregivers, especially along elderly and disabled individuals, said Subcommittee Chairman Tim Walberg (R-MI).
“Companion caregivers often work long hours and under difficult circumstances. The services they provide are critical,” Walberg said. “They—like all Americans—deserve responsible solutions that will help grow our economy and promote the income security of their families.”
Written by Jason Oliva