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Home Care Industry Can Afford to Pay Workers Fair Wage, PHI Fact Sheet Shows

February 2, 2012

The thriving home care industry brought in roughly $84 billion in revenue in 2009, the last year for which data is available, according to a new PHI fact sheet.

Faced with a proposed federal rule that would require home care companies to pay workers a minimum wage and overtime pay, many home care companies have argued that they could not possibly comply without passing along costs to consumers.

But the PHI fact sheet, Value the Care No. 5 (pdf), demonstrates that these claims are unfounded. The home care industry has flourished in recent years, growing steadily even during the recession.

Total revenue climbed at a yearly rate of about 9 percent between 2001 and 2009, while the number of home care providers increased by 20 percent each year from 2001 to 2010.

Low Wages Persist

Despite their tremendous success, many home care companies continue to pay their workers poverty-level wages.

The median hourly wage for home care workers was just $9.40 in 2010. Nearly half had to rely on public assistance, such as food stamps to supplement their low wages and Medicaid for health care coverage.

Currently, the companionship exemption to the Fair Labor Standards Act allows home care companies to legally pay their workers less than minimum wage and deny them time-and-a-half overtime pay.

In December, however, President Obama announced a plan to revise the companionship exemption regulations so that the vast majority of home care workers would receive wage and hour protections under the Fair Labor Standards Act.

The public is invited to comment on the proposed rule. The comment period ends February 27.

— by Matthew Ozga

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