In-home care service is a high growth industry, and it’s projected to grow by 50 percent between 2008 and 2018. In-home caregivers are an essential component of the health care system and will only become more important, as an increased number of patients turn to them for more affordable assistance with medical care as well as everyday tasks and household chores.
Many homecare providers earn less than the minimum wage and no overtime for these vital services. In 2007, then-Senator Obama spent a day with professional homecare worker Pauline Beck, assisting with her daily tasks and observing firsthand the unique challenges of in-home care (watch the video). He was impressed by Pauline’s dedication, and determined to assist her and others in her profession.
Today, Pauline joined me and President Obama as he announced a proposal from the U.S. Department of Labor to revise the Fair Labor Standards Act rules that would ensure fair pay for approximately 1.8 million workers who provide in-home care services for the elderly and infirm. This new rule would ensure that these hardworking professionals who provide valuable services to American families would receive the protections of minimum wage and overtime pay that nearly every employee in the United States already receives under the FLSA.
Many of these workers are the primary breadwinners for their families. Of the roughly 2 million workers who will be affected by this rule, more than 92 percent are women, nearly 50 percent are minorities, and nearly 40 percent rely on public benefits such as Medicaid and food stamps. According to the Bureau of Labor Statistics, home health care aides earn about $21,000 a year and many lack health insurance. That is unacceptable.
The proposed regulation would also ensure that employers who have been treating these workers fairly are no longer at a competitive disadvantage. Leveling the playing field for both workers and employers is a fundamental principle of the FLSA.
My department is committed to fighting for good jobs for everyone, jobs that enable workers to earn a living wage, afford health insurance and save for retirement. The services provided by in-home health care providers aren’t just professional; they’re personal. And for millions of American families, they’re indispensible. That’s why it’s so important to ensure that they receive the same job protections available to the majority of working Americans
Once published, we encourage you to provide comments on this important proposal by visiting the federal rulemaking website at www.regulations.gov. More information, including the proposed rule and fact sheet, is available at http://www.dol.gov/whd/flsa/companionNPRM.htm.
{ 31 comments… read them below or add one }
The link to the rule is not working…?
Thanks Amber. Check out the updated link.
Will photos or video of the announcement ceremony be posted?
I think this review needs to understand that when a family employs a private duty caregiver for this type of service, the wages are rarely reported. The family is responsible for the hiring process, insurance, wages reporting, workers comp insurance, liability insurance etc.. Not to mention that if the caregiver is ill the family then becomes responsible as well. With a service agency the caregivers are screened, bonded, insured and the wages are reported. With this proposal it would make it more difficult to monitor what is actually happening in this arena. Currently the family could hire an agency or they could elect to hire an individual. This type of law would make it impossible for an agency to offer the family a more affordable rate thus taking away choices for the family. For our agency, a caregiver working 5 live in days per week would make approximately $50,000 per year.
The true intent of this intiative is to empower a major constituent of the Service Employees International Union: http://www.seiu775.org/dc/healthcare/Default.aspx
By combining medicare payments with a unionized care-providing labor force, progressives will nationalize health care from both the bottom (the poor, underpaid, low-skilled in-home health aide) up and the top (America’s Affordable Health Choices Act, probably the most paradoxically named piece of legislation of the past 65 years after the euphemistcally titled, “Social Security” Act) down.
This is the most corrupt administration in the entire history of the United States.
The struggle to preserve freedom somewhere in the world as a refuge from tyranny has been fought here in the United States against progressivism for 100 years. Progressives applauded the wonders of Soviet Russia under Stalin’s leadership (read “The Forgotten Man: A New History of the Great Depression” By Amity Shlaes), praised Mussolini as a amazing and effective lawmaker (there are too many references to cite; see, for example, http://www.discoverthenetworks.org/viewSubCategory.asp?id=1223), and named Adolph Hitler ‘Man of the Year” in 1938 (see Time Magazine, published Monday Jan. 2, 1939; http://www.time.com/time/magazine/article/0,9171,760539,00.html). The primary tool of progressivism is consolidation of the 3 fundamental authorities of government: lawmaking (legislative), executive (administrative), and judicial (dispute resolution). Administrative agencies are the engine that drives a wedge between governance and the People.
Article 1 of the US Constitution clearly states that THE (exclusive) legislative authority at the federal level, i.e. the power to make law, vests in Congress and NOT in the people who populate it. Legislators lack the power to transfer any portion of that lawmaking authority from the institution of Congress, although that is precisely the bluff that has derailed the United States’ republic for 100 years. All law-making power is supposed to be directly accountable to the people through elections, but none of us have ever cast a single ballot to elect the administrator of EPA, for instance. Furthermore, every regulation accomplishes only 1 thing: it creates a bully means–that masquerades as legitimate legal authority–for unelected bureaucrats to steal money from the target of the regulation. Across the country, we, and particularly business owners, must realize that regulation is NOT law.
Understand that Congress has nothing to do with regulation. Congress makes laws by passing bills, and the president may either sign those bills passed by Congress, thus converting the bills into laws, or veto any bill. Regulation, on the other hand, is written by the myriad administrative agencies which have been created by acts of Congress during the past 100 years (e.g. CFTC, FTC, EPA, OSHA, CPSC, TSA, FAA, FCC, etc.). That’s right–a total and blatant violation of the separation of powers doctrine inherent in the Constitution, i.e. the executive (administrative) branch has NOTHING to do with making laws, but ONLY with enforcing them. Furthermore, all members of the executive branch, whether they be police officers, governors, etc. are citizens of the United States first, and officers of the government second, which means that each of them must determine whether a law passed by the legislature (either Congress or a state legislature) is consistent with the Constitution (US and of the particular state). If not, don’t enforce it. We are ALL stewards of the Constitution(s) first and foremost. Obviously, the same applies to every single regulation created by every single administrative agency. In fact, none should be enforced because the executive lacks any authority to create law or quasi-law, but it will take diligence and repetition for this truth to take hold.
Steve, footage from the event is available at: http://www.whitehouse.gov/photos-and-video/video/2011/12/15/president-obama-ensuring-fair-pay-home-care-workers.
For wage earners near a minimum-wage level, when the level is increased: Some will receive a boost, a few will be laid off, and others will not be hired. All-in-all, the notion of a minimum-wage increase seems to be a bad idea.
The Secretary of the Department of Labor, Hilda Solis helped create a method to circumvent this ruling in 1993 when she voted yes to allow Domestic Referral Agencies to provide workers to clients, bill the clients and pay the workers and yet transfer employer responsibilities to the unknowing clients. This means there is no social security , Medicare, unemployment, disability payments, federal and state income tax deductions and no workers compensation. Through the years this simple civil code change has exploded to the point where most home care agencies in California are using it. In the meantime, the DOL rule chane will not effect these agencies that issue 1099s but do not technically employ the worker- it only hurts the agencies that treat their workers as employees and pay all relevant taxes, etc..
This DOL change without a alfiornia Civil code change will make the largest underground industry in the country larger and larger. I foresee one hundred thousand aides going into the grey market and lossing Medicare and Social Security, workers compensation and disability coverage.
Very interested in following up on your blog.
I applaud your effort to publish a blog and publish the comments. It is an education. Thank you.
All employees that work in the Caregiving field need to be paid and treated fairly for their services, they are taking care of our most frail and vulnerable people. What is most disturbing about this proposed rule making, is that third party employers are not allowed to use the exemption, but if an individual hires a Caregiver independently they can. Usually when people hire “a casual” friend or neighbor there are no protections or background checks, and usually no taxes withheld, or Social Security or Medicare paid for these employees. Often this places a huge liability onto the Senior as the employer, who now has to comply with employer regulations, which most Seniors are not aware of, nor do they carry any insurances. Most Seniors and their families want to hire from a reputable company that is the employer, who handles the personnel issues, who pays into social security, medicare, and other state and federal taxes, as well as carries Workers Compensation and Liability Insurance. Third Party employers also provide training, supervision, background checks, and 24 hour back up staffing when the regular Caregiver calls off, or takes Vacation. This proposed rule making will make care more expensive, and drive Seniors and their families to the underground economy. We need more tax payers, not more people going underground. If One (casually hired) Caregiver gets the Exemption, then All Caregivers (including ones employed by Agencies) should receive it. Let’s be Fair if nothing else.
This proposed ruling will affect the 24 hour/Live-in Caregivers the most. Currently, using the Companionship Exemption, a 24 hour Caregiver can make $960-1152 per week, If this ruling becomes law I will be required to place 3 caregivers in the senior home, and since they would be required Overtime, they would be limited to 40 hours per week, or $320-400 per week, a 66% decrease in pay, with less control on the scheduled days and times of their shifts. The cost to the senior will also increase since they will be required to pay for 3 caregivers on an hourly basis, instead of 1 caregiver that is able to eat, sleep, and have breaks during the day when the Senior is resting. The average cost to stay at home will increase from $295 a day to over $560 per day, which will require more patients to fall back on Social Security for institutional care, rather then paying privately to stay at home.
This rule change is so disconcerning because it is aimed at only one segment of the industry – the third party home care agencies. It completely exempts the “grey market” which is the largest segmentof the industry. In California, that includes the Domestic Referral Agencies that through loophole put in the civil code allows for them to transfer employer responsibilities to the client yet schedule workers, bill the client, pay the worker and pose like a third party agency and yet have no tax payment or collection, workers compensation and wage and hour liabilities. Currently, the DOL is issueing statesments on the problems with worker misclassification but this rule change is only further promoting such. This rule change will grow the grey market as seniors have legitimate needs and if the government prohibits agencies from providing those needs (like live-in care) the underground economy will provide the services. The document is full of statements and assumptions which are not quite accurate. In one place it alludes to injections may only be given by workers who had special training like certified nursing assistants where in fact there probably is no state that allows CNAs to give injections. It states that agencies are using aides in homes and facilities without overtime while in fact the current regs do not permit the overtime exemption to be used anywhere but a private home (no facilities). Of course there are exceptions to these rules as the grey market and the DRAs in California that issue 1099s have already marketed and capitalized on their special “waivers”to do what is legally prohibited . This DOL change not only allows the underground economy to exist but it further supports it. In the end, the aides and clients suffer. The aides who work in the grey market will not have social security and Medicare benefits nor are they eligible for unemployment and disability benefits and the seniors are not able to get professionally supervised care with the liability and worker compensation protections insured. Many clients and families seek agencies only after they have been burned by the theft, worker injuries, claims for unemployment coverage, etc.. If the DOL strongly feels the need to make the rule changes it must be universally applied otherwise this is not a true democracy.
I have no problem with minimum wage for hourly workers, however overtime requirements will only hurt the very people they are trying to help. Let’s say companion works 60 hours per week at $10.00 per hour, that’s $600.00 per week, now her employer is forced to only schedule her for 40 hours at the same rate, that has now reduced her pay by $800.00 per month. The employer will not pay overtime, the aide will probably get a second job and guess what? She is now working 60 hours and still not getting overtime. More of these employees are going to need oublic assistance because no one can survive on $400.00 per week. It’s ridiculous and it hurts people who are already struggling in the guise that it is boosting their income. That is why legislators who have never owned or run a business shouldn’t be the ones making these rules.
Jo-Ellen: I agree. However, the term, “legislators” does not apply, because this proposal that is the subject of this blog post is NOT an act of Congress. On the contrary, it is merely fiat lawmaking, because the “rules” are generated by unconstitutional administrative agencies. You’ve never voted for the administrator of EPA, OSHA, FCC, FTC, CPSC, etc. have you even though Article 1 of the US Constitution provides that ALL legislative authority must be accountable directly to the People, i.e. subject to the electoral process?
Please revisit this DOL rule proposal – as it is discriminatory and hurts the one industry segment that offers the elderly and the workers the best protection.
A week in the life of a third party home care agency adminsitrator in California:
Monday- read SF Catholic newpaper home care ads- all three agencies use independent contractors yet imply otherwise
Tues- applicant calls- has no SS No. but has been working as 1099/IC with a competitor who has claimed for years that she covers payroll, w/c, etc/
Wed- applicant comes in after working with another competitor who EDD has told is not eligible for unemployment as agency she worked for used her as IC and issued her a check with stub but kept $460 of her supposedly $160 check- for 7 – 12 hour days at $15 an hour
PM – in shock – after respected attorney for third party agencies sent email out soliciting agencies interesting in switching model to Referral to avoid DOL ruling that tarkets “third party agencies” only. More and more employer-employee home care agencies going into “legal” grey market .
Thurs- see new agency brochures from hospital kiosk- all issuing checks to workers without payroll deductions ( using independent contractors -technically they are not ICs but client employees) One, part of a national franchise claims to send out office staff to visit regularly for peace of mind (note supervision = employee to the IRS), another assmes “workers comp” but in actuality takes funds from the aides for a limited “accident and liability” insurance.
Friday – reads report “The Role of Independent Contractors in the U.S. Economy” by Jeffery Eisenach – funded by the Coalition to Preserve Independent Contractor Status which touts why the IC model should be used and reports all the issues with the traditional third party employer models including higher cost of operation and to consumer (workers compensation, payroll taxes, Medicare , social security and unemployment costs, wage and hour regs).
If the DOL really wants to reduce worker misclassification and protect the worker- it should be supporting the third party model and not discriminatory against this model in favor of the private hire and referral home care agencies. As Mr. Eisenach states in his report the ICs (page 1) “do not participate in employee benefit programs, including staturily mandated programs such as unemployment insurance and workers compensation; are not covered by overtime and minimum wage mandates; and, are not subject to payroll withholdings (of either income taxes or Social Security). On page 4 of the same report – he states that the worker is “generally not covered by overtime and minimum wage laws —may not be covered by unemployment insurance, may hav enhanced opportunities for tax advantaged retirement savings, and may be exempt from provisions of the national labor relations Act. Please Ms. Solis do not send another 65 year old applicant into my office asking for work because he or she has not contributed to Medicare and Social Security and needs to start now. We pay far in excess of the minimun wage but offer 12 hour shifts to aides that prefer that and for safety reasons (eliminating the 10PM to 12Midnight change of shifts) Live-ins are common in this area as seniors are alone in houses with plenty or room .
If yoou choose to eliminate these services- do it fairly and across the board. The aide or attendant is working regardless of who is paying him or her. The only difference is tha the third party agencies are providing workers compensation, unemployment insurance and their portion of the workers Medicare and social Security.
Brandi Johnson said exactly what I was intending to say. I also own an agency and this rule will force me to limit the hours to 40 per week. Waiver services pay half the rate for “sleep time” and if the sleep hours count as part of the 40 and have to be paid at minimum wage, we will be forced to discontinue the service since we will not be able to pay staff more than the agency is reimbursed for the hours of care. Everyone will lose in this situation except the Unions. I will be forced to have many staff for the individuals we serve instead of the consistency of one or two that know them best and are able to take care of them the best. I am able to pay a higher wage because of the protection of the companion rule. I will have to drop my wage rate to minimum wage and have staff that will have to look for another job to end up making less than they are now. Please do not change this rule.
Thank you for taking the time to respond. If you’d like your opinions to be reviewed as part of the formal comment-review process, please submit them through the government’s federal rulemaking website here: http://www.regulations.gov/#!documentDetail;D=WHD-2011-0003-0001.
can you company make you come in on your off days to interview for a job and not pay you
very useful blog for the purpose of home care workers.
Very good written article. It’s an education. Thank you.
One of the few things that work properly in Brazil, and recycling. Perhaps it is a business entirely run by the Brazilian people.
Excellent site you have here but I was wanting to know if you
knew of any forums that cover the same topics discussed here?
I’d really love to be a part of group where I can get advice from other knowledgeable individuals that share the same interest. If you have any suggestions, please let me know. Bless you!
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Great article on in home health care. Being I have family that has received and provided in home health care I can see the value of both points of view.
In-home care service is a high growth industry..Many homecare providers earn less than the minimum wage and no overtime for these vital services.
Always employers make fool to labors.
Most of the employers don’t pay overtime.
I believe in-home healthcare is going to be crucial as our largest population yet is reaching in-home healthcare age, and in-home healthcare can help keep costs down as we’re experiencing a healthcare crisis, so we definitely need to take care of our in-home healthcare workers, especially if we want quality in-home healthcare workers taking care of our, or at least in my case, parents
It’s just unfair that these home care workers are working real hard to provide care to those people who can’t afford more expensive long term care options or do not have anyone to take care of them, yet they cannot receive fair wages and better benefits. Caregiving is a difficult and stressful work so please give the workers what is due to them
Great article on in home health care. Got a lot of information from this post. Please give us some more news. Thanks for your post in fact it is an excellent post.
We definitely need to take care of our in-home healthcare workers if we want quality workers taking care of us or our parents