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Obama Administration’s New Rule on Federal Labor Protections Is Victory for 2 Million Home Care Workers, States PHI President Jodi M. Sturgeon

September 17, 2013

PRESS STATEMENT

Today, the U.S. Department of Labor announced a final rule narrowing the companionship exemption under the Fair Labor Standards Act (FLSA), which has excluded America’s home care workers from federal minimum wage and overtime protections for nearly 40 years. PHI is pleased that the long wait is over for millions of home care workers, and we will continue to work hard to ensure implementation of this and other policies that strengthen care jobs and quality of care for consumers.

The Department of Labor rule assures that, beginning in January 2015, the vast majority of home care workers will be covered under FLSA, the nation’s most basic labor protections. In addition to guaranteeing federal minimum wage and overtime pay, FLSA requires covered workers to be paid for time and cost of travel between clients. The extended phase-in allows for a thoughtful and deliberate implementation process that will minimize any potentially disruptive impacts to Medicaid services and state budgets.

This is a tremendous victory for home care aides, a workforce earning near-poverty wages while providing vital personal care and health-related services to America’s elders and people living with disabilities.

PHI estimates the home care workforce — home health aides and personal care aides providing support in home and community-based settings — at about 2 million workers. These two occupations are the nation’s fastest-growing jobs (pdf), projected to increase by 70 percent over this decade. By 2020, America will need an estimated 4 million home care aides to meet the support needs of its aging population—which means that there will soon be more home care aides than K-12 teachers in the U.S.

We are pleased that the Obama administration has fulfilled its promise to treat home care workers with respect and fairness. Notably, about 70 percent of these jobs are paid for through public funds.

Building a Stable Workforce

Attracting enough workers to fill these positions will be challenging. Narrowing the companionship exemption is an essential first step. Additionally, we need to strengthen training requirements and establish career pathways for more experienced aides. Quality home care requires a stable, skilled workforce, and we cannot reach that goal without better quality jobs.

PHI’s analysis of the home care workforce shows that the proposed changes will not dramatically increase costs across the industry. Home care is largely a part-time occupation, with less than half of workers employed full-time year round; less than 10 percent of workers report working overtime. In addition, 15 states already provide minimum wage and overtime protections to their home care workers under state law, including states with some of the most robust home and community-based services programs in the nation.

This change in itself will not dramatically increase wages but it provides a solid floor on which to improve the quality of these essential jobs.

Coalition Effort

This victory is the result of an unprecedented coalition of organizations who joined together to encourage the White House and the US Department of Labor to extend minimum wage and overtime protection to home care workers. PHI’s analysis of the home care industry, including cutting-edge research on the size, demographics, and employment patterns of the workforce, was instrumental in the U.S. Department of Labor rulemaking process.

For more information the companionship exemption, see the PHI Campaign for Fair Pay website.

To see which states provide state minimum wage and overtime protections, check out this map.

For state-by-state information on the home care workforce, including workforce size, employment projections, and wages, see the PHI State Data Center.

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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; dbeebe@phinational.org

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