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“Companionship Exemption” Comment Period Wraps Up Following House Committee Hearing

March 22, 2012

As the clock struck midnight on March 21, the public comment period on the proposed rule to revise the “companionship exemption” under the Fair Labor Standards Act (FLSA) drew to a close.

Nearly 10,000 comments on whether home care workers should be extended basic federal minimum wage and overtime protections, including comments submitted by PHI (pdf), have been registered on the official government website.

The next step is for DOL to review all of the submitted information before it issues a final rule on the companionship exemption, which is anticipated to be sometime this summer.

Kudos to the Workers

The day before the comment period closed, the Workforce Protections Subcommittee of the U.S. House of Representatives Education and the Workforce Committee held a hearing entitled, “Ensuring Regulations Protect Access to Affordable, Quality Companion Care.”

While there was much disagreement between Committee Chair Tim Walberg (R-MI), Ranking Member Lynn Woolsey (D-CA), and the hearing witnesses about whether revising the regulation to include home care workers was affordable for business and how it would impact consumers and workers, everyone agreed that home care workers are invaluable: they make it possible for elders and people with disabilities to live independently in their homes instead of in more costly nursing homes.

Walberg sang the praise of the home care workers who assisted his own parents in their later years. However, despite giving kudos to the home care workforce for the important work that they do — including the many workers in attendance at the hearing — Walberg claimed that extending home care workers a fair wage would raise costs and have unfavorable consequences for consumers and workers.

Woolsey countered by saying that today home care is a “booming industry” and the services and supports that the “modern” home care workforce provides “far exceeds [the] fellowship and companionship” services that FLSA originally intended to exempt.

Woolsey said that the “bottom line” of the home care business is to “bill twice what the worker receives,” but the worker then “ends up on public assistance” with the taxpayers paying the cost.

Impact Has Been Manageable

Catherine Ruckelshaus, legal co-director of the National Employment Law Project, was among the witnesses who testified (pdf) in favor of extending home care workers basic labor protections. She explained that Congress never intended to carve out home care workers from FLSA when it revised the law in 1974 to include other domestic workers.

Fifteen states already provide overtime and protections and another five provide minimum wage protections, and the “impacts have been manageable,” Ruckelshaus said.

She added that there is no data that shows that states that have more labor protections “have higher rates of institutionalization,” which suggests that “the remaining states are capable of making this shift without major disruptions to their long-term care systems.”

In a statement (pdf) submitted for the record, PHI reiterated its position that home care aides cannot continue to be treated as if they are casual companions:

Home care is the nation’s fastest-growing occupation (pdf), expected to grow to over 3 million workers by 2020. Yet these workers, who are 90 percent female with a median age of 45, continue to be treated in the same fashion as teenage babysitters. Home care, however, is a true vocation, and should be treated as such under the law.

Industry Studies Are Seriously Flawed

Opponents of extending home care workers basic labor protections have been trying to support their claims with recent industry-funded studies, but PHI has conducted its own analyses, finding that these studies — which suggest that the proposed regulations will have a negative impact on businesses, consumers, and workers — are seriously flawed.

All of the witnesses’ testimony, an archived webcast, and other information from the hearing are available on the DOL website.

— by Deane Beebe

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