New PHI Analysis Reveals Thriving Home Care Industry, Refutes Industry Claims that Revised "Companionship Exemption" Proposal Would Be Unaffordable
"Involuntary" Part-Time Work Is Real Problem Plaguing Home Care Workforce
New York, NY — In three new publications, PHI examines the fast-growing home care industry and its claims that the Department of Labor's proposal to narrow the companionship exemption — and require time and a half for overtime hours — is unaffordable.
Can Home Care Companies Manage Overtime Hours? Three Successful Models (pdf) profiles three agencies — Community Care Systems in Illinois; Addus HealthCare, a nationwide company; and Cooperative Home Care Associates in New York City — all of which pay their aides time and a half for overtime. These three companies have differing case loads, service areas, and business models, yet all three have implemented similar staffing and scheduling practices to maintain continuity of care for clients while keeping overtime hours within a manageable budget.
"These real examples tell us that once there is a financial incentive for home care companies to manage overtime hours, they won't just stand still and let their businesses suffer but instead will adopt modern staffing and scheduling practices, just like the companies profiled in the report," said PHI Director of Policy Research Dorie Seavey, co-author of the report.
Industry Claims on Overtime Not Corroborated By Data
In Home Care Jobs: The Straight Facts on Hours Worked (pdf), Dr. Seavey analyzes nationally representative surveys, concluding that, even without incentives to manage overtime, the industry is not using excessive overtime hours. Less than 10 percent of home care aides report working overtime, according to her findings.
"The real problem for this workforce is not overtime but 'involuntary' part-time work," Dr. Seavey said.
According to Dr. Seavey's analysis, only about 40 percent of home care aides work full time, year round. Of part-time workers, 40 percent report wanting additional hours. The number of these workers is 250 percent greater than the number who report working overtime.
"One benefit of the industry more pro-actively managing overtime is that hours will be spread more evenly over the workforce, providing additional hours for many workers currently unable to cobble together sufficient hours," Dr. Seavey said.
Industry Growth Belies Hardship Claims
The home care industry is among the fastest-growing industries in the country. Even during the recession, the industry continued to grow. A third PHI fact sheet, Growing Labor Industry Can Afford Labor Protection (pdf), shows that revenues for the industry have doubled from about $40 billion to $84 billion between 2001 and 2009.
At the same time, home care workers have seen their wages stagnate. In 2010, the average hourly wage was $9.40 an hour, about equivalent in inflation-adjusted dollars to the $8/hour wage workers were making a decade before. As a result, nearly 50 percent of home care aides live in households that rely on some form of public assistance — e.g., food stamps, housing assistance, or Medicaid.
PHI's analysis confirms the Department of Labor's conclusion that the cost of narrowing the companionship exemption and providing basic labor protections to nearly 2 million home care workers is relatively small. The three companies profiled in Can Home Care Companies Manage Overtime Hours? Three Successful Models (pdf) show that it is possible to provide quality services and decent jobs yet still succeed in business. These companies together provide home care services in 20 states. In addition to these three examples, there are many other companies — in the 15 states that require minimum wage and overtime protections under state law as well as those that are not required to but choose to out of basic fairness — that also successfully manage overtime hours.
"While the industry is focused on the cost of a relatively small amount of overtime, a far deeper concern for the workforce is how to find full time work in a part-time industry," Dr. Seavey said.
Can Home Care Companies Manage Overtime Hours? Three Successful Models (pdf) was made possible with support from the Ford Foundation.
Visit the PHI Campaign for Fair Pay website for more information on the companionship exemption, including the PHI Value the Care issue brief series and Caring in America, a report on the home care industry.
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PHI, the Paraprofessional Healthcare Institute (www.phinational.org), 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
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