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Karen Kulp, PHI Board Member and Home Care Agency President, Testifies in Support of the New DOL Companionship Exemption Rule Before House Subcommittee on Workforce Protections

November 20, 2013

Washington, DC — PHI Board Member Karen Kulp, president and CEO of Home Care Associates (HCA) in Philadelphia, Pennsylvania, testified today before the U.S. House of Representatives Subcommittee on Workforce Protections of the Committee on Education & the Workforce in support of the new U.S. Department of Labor Rule to extend home care workers federal minimum wage and overtime protections.

"Nationwide, an estimated 27 million Americans will depend on our system of long-term services and supports by 2050. Increasingly these individuals prefer to receive care in their homes and communities," Kulp said in her testimony.

"To ensure quality care in home-based settings, federal policies must support the development of a stable, skilled home care workforce. Implementation of minimum wage and overtime protections for home care workers is an essential step toward reaching that goal," she said.

On October 1, the U.S. Department of Labor published a revised rule that clarifies and narrows the definition of the companionship exemption, which for decades has excluded all home care workers from minimum-wage and overtime protections under the federal Fair Labor Standards Act. Under the revised rule, home care aides who work for third-party employers, such as home care agencies, will no longer be exempt from federal wage and hour rules. Household employers may continue to claim the exemption under narrowly defined conditions. The new U.S. Department of Labor rule becomes effective on January 1, 2015, providing 15 months for employers and public programs like Medicaid to adapt to the overtime rules.

"Home care is skilled work. It is hard, messy and physically challenging," testified Kulp, whose 20-year-old agency employs over 200 home care workers. HCA serves primarily individuals below the age of 65 with disabilities (70 percent of its client base), and receives 90 percent of its revenue from Medicaid.

This "90 percent female workforce [nationally] assists elders and people with disabilities with personal care needs like dressing, bathing, going to the bathroom, eating, and mobility services, which are far more crucial and require far more skill than providing simple companionship," Kulp explained to the committee.

Home care workers' "poor wages, averaging less than $10 per hour, make recruitment and retention for these positions difficult," she testified. "Inadequate compensation contributes to high rates of turnover, undermining quality of care, and jeopardizing access to needed services in the face of growing demand."

Personal care aide and home health aide are projected to be the nation's fastest-growing occupations between 2010 and 2020, increasing by 71 percent and 69 percent, respectively.

"We invest in quality jobs in order to provide quality care," said Kulp, whose agency pays minimum wage and overtime, provides quality training, and offers full-time employment. (Industry-wide, more than half of home care aides work part time [pdf].)

"Our investments have paid off," Kulp testified, adding that at her agency, the average length of employment is nearly three years, yet industry-wide three-quarters of the workers have been employed less than 12 months. "Our clients appreciate the quality and continuity of care we provide as a result of this stability," she said.

Regarding overtime pay, industry-wide, less than 10 percent of home care workers report working more than 40 hours per week (pdf). Home Care Associates manages its overtime cases by establishing a care team that includes two or three aides.

The consumers benefit, Kulp said, because in the absence of one worker, there will always be coverage from someone the client knows, and the workers are not overtired and stressed out, reducing burnout and rates of injury for consumers and workers.

"It's a win-win-win — workers and consumers are better served, overtime costs are low, and HCA has a healthier and more stable workforce," Kulp testified.

The home care industry, with revenues (pdf) of $93 billion last year and an average growth rate of 8 percent per year from 2001 to 2011 — despite the Great Recession — is a thriving industry that can afford to pay home care workers minimum wage and overtime, as demonstrated by the 15 states that already mandate minimum wage and overtime pay protections, Kulp testified. (Pennsylvania is one of the 15 states.)

In her testimony, Kulp cited the experience of Michigan, a state that mandated greater labor protections for home care workers in 2006. Its home care sector grew more quickly in the five years following the implementation (41 percent increase) than the five years before (32 percent increase).

"In our business, rising worker compensation costs, higher gas prices, and reimbursement rates that have not kept up with the cost of living are a far greater threat to profitability than paying minimum wage and overtime," Kulp said in her testimony.

"The new rule recognizes the professionalization of this workforce and the skills these jobs now require. After many decades, the rule will, at long last, give home care workers the same rights as other American workers. It is an important first step toward ensuring that the American people get what they need and want — a stable, competent workforce to allow elders and people living with disabilities to remain at home and to live independently and with dignity," Kulp concluded in her testimony.

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PHI, the Paraprofessional Healthcare Institute, works to transform eldercare and disability services, fostering dignity, respect, and independence — for all who receive care, and all who provide it. The nation's leading authority on the direct-care workforce, PHI promotes quality direct-care jobs as the foundation for quality care.

Deane Beebe, PHI Media Relations Director; 646-285-1039 (cell); dbeebe@phinational.org

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