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REPORT: GAO Assesses Potential Impact of New DOL Home Care Worker Wage Rule

December 23, 2014

The U.S. Government Accountability Office (GAO) released on December 17 a report on the regulatory process pertaining to the U.S. Department of Labor (DOL) regulation which extends minimum wage and overtime protections to home care workers.

The new rule is scheduled to go into effect January 1, 2015.

To produce the report, the GAO reviewed DOL’s rulemaking process, interviewed key stakeholders from 14 national organizations, and researched steps DOL has taken to assist state Medicaid agencies and other stakeholders to understand and comply with the regulation.

GAO’s interviews with stakeholders yielded a wide range of responses to questions about the potential effect of the rule on employers, the home care workforce, consumers, and state Medicaid programs.

GAO also interviewed state and local officials from Arkansas, California, New York, Pennsylvania, Tennessee, and Vermont about their Medicaid programs, implementation of the rule, and any challenges they may face in doing so. GAO selected these states because they represent a variety of Medicaid programs, existing state labor protections, and geographic locations.

GAO’s conclusion is that home care agencies and state Medicaid programs are responding to the rule with programmatic and policy changes, but the effects of the rule will remain unclear until after it is implemented. The effect on workers and consumers will largely depend on how employers, including state Medicaid programs, choose to respond to overtime requirements. Further, GAO recommends that DOL, in consultation with the Centers for Medicare and Medicaid Services, plan for a retrospective review of the impact of the rule once it is fully implemented.

GAO noted a pending challenge to the rule in federal court. The court issued a ruling in that case on December 22.

— by Gail MacInnes, PHI Government Affairs Manager

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