The Obama administration announced Tuesday that it was extending minimum-wage and overtime protections to the nation’s nearly 2 million home-care workers.
Advocates for low-wage workers have pushed for this change, asserting that home-care workers, who care for elderly and disabled Americans, were wrongly classified into the same “companionship services” category as baby sitters — a group that is exempt from minimum-wage and overtime coverage.
Under the new rule, home-care aides, unlike baby sitters, would be protected under the Fair Labor Standards Act, the nation’s main wage and hour law.
In an unusual move, the administration said the new regulation would not take effect until Jan. 1, 2015, even though regulations often take effect 60 days after being issued.
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The delay until 2015 is to give families that use these attendants, as well as state Medicaid programs, time to prepare.
Industry experts say most of these workers are already paid at least the minimum wage, but many do not receive a time-and-a-half overtime premium when they work more than 40 hours a week. About 20 states exclude home-care workers from their wage and hour laws.
“We think the workers providing this critical work should be receiving the same basic protection and coverage as the vast majority of American workers,” said Laura Fortman, deputy administrator of the Labor Department’s Wage and Hour Division. “We’ve seen a lot of turnover in this industry, and we believe that this new rule will stabilize the workforce.”
The nation’s home-care workers usually earn $8.50 to $12 an hour, according to industry officials. The federal minimum wage is $7.25 an hour.
According to the Obama administration, almost 40 percent of aides receive such government benefits as food stamps and Medicaid. Ninety-two percent of these workers are female, about 30 percent are black and 12 percent are Hispanic.
Industry officials said the changes would cause increases in Medicaid and Medicare spending, raise costs for families that use such services, and result in fewer jobs for home-care workers.
Andrea Devoti, chairwoman of the National Association for Home Care and Hospice, said the higher costs resulting from the new rule would lead many people to hire home-care aides part time rather than full time.
“Caregivers will in the end receive less pay,” she said.
Fortman of the administration’s wage and hour division said 15 states now provided overtime and minimum-wage protection to home-care aides.
“We have not seen any evidence that it has resulted in job loss or any serious negative impact for the workers or for the people using the services,” she said.
The administration announced the change 21 months after first proposing the rule and after having received 26,000 public comments, many of them from for-profit home-care agencies that opposed it.
Many labor advocates criticized the administration for taking so long to issue its final rule, but Labor Department officials said reviewing the comments and holding related public meetings took time.
The federal government says 6 million of the 40 million Americans older than 65 need some form of daily assistance to live outside a nursing home. Federal officials estimate that the number will double to 12 million by 2030.
Under the new rule, any home-care aides hired through home-care companies or other third-party agencies cannot be exempt from minimum-wage and overtime coverage.
The exemptions for aides who mainly provide “companionship services” — defined as fellowship and protection for an elderly person or person with an illness, injury or disability who requires assistance — are limited to the individual, family or household using the services.
If an aide or companion provides “care” that exceeds 20 percent of the total hours she works each week, then the worker is to receive minimum wage and overtime protections.
The new rule defines care as assisting with the activities of daily living, such as dressing, grooming, feeding or bathing, and assisting with “instrumental activities of daily living,” like meal preparation, driving, light housework, managing finances and assisting with the physical taking of medications.
The companionship exemption will not apply if the aide or companion provides medically related services that are typically performed by trained personnel, such as nurses or certified nursing assistants.
Live-in domestic service workers who reside in the employer’s home and are employed by an individual, family or household are exempt from overtime pay, although they must be paid at least the federal minimum wage for all hours worked.