During a House Subcommittee on Workforce Protections hearing
– Redefining Companion Care:
Jeopardizing Access to Affordable Care for Seniors and Individuals
with Disabilities – panelists and
lawmakers highlighted problems that await home care providers,
workers, and care recipients when the Department of Labor's new
home care rule takes effect in January 2015. Issued in
September, the final rule eliminates the
Fair Labor Standard Act's (FLSA) minimum wage and overtime
exemption for home care workers employed by home care agencies and
other companies. This rule also significantly narrows the
exemption for home care workers employed directly by the
individuals or families receiving home care services.
Subcommittee Chair Tim Walberg (R-MI) said that he has asked the
DOL for a justification for this rule, but has yet to receive
any. He claimed the rule imposes "rigid and
arbitrary" requirements on home care providers, and creates
more hardship than benefits.
According to witness Lucy Andrews, Vice Chair of the National
Association for Home Care & Hospice, most home care agencies
already pay their employees a rate exceeding the minimum wage, and
the rule's overtime requirement will result in these employees
being paid less than before. Andrews explained that home care
agencies will need to restrict working hours or charge their care
recipients more. Coupled with the Affordable Care Act's
employer mandate – the implementation of which will coincide
with the home care rule's effective date – the new
rule's requirements will create "a perfect storm" for
home care agencies.
Ms. Andrews challenged the change to national standards that
have been in place for nearly 40 years. She testified that, based
on experience in states that previously have required overtime
compensation to personal care workers, she believes that the rule
will trigger the following:
Moderate to significant increases in care costs
Restrictions in overtime hours to the detriment of the
workers' overall compensation
Loss of service quality and continuity
Increased costs passed on to the patients and public programs
such as Medicaid that would decrease service utilization, increase
unregulated "grey market" care purchases, and increase
institutional care utilization rather than absorbing and covering
the higher cost of care.
In response to questioning, Ms. Andrews disagreed with the
contention that the new rule would reduce turnover of home care
workers. Instead, she opined that the rule change would have the
Joseph Bensmihen, President and CEO of United Elder Care
Services, Inc., echoed this sentiment, stating that the rule will
have "far reaching and adverse consequences,"
particularly for individuals who choose home-based over
institutional care. He said individuals will need to pay
"substantially more" for the care they need, or be
subject to multiple caregivers. Bensmihen testified that to avoid
paying overtime, home care agencies will rotate caregivers, which
will result in a loss of continuity of care. According to
Bensmihen, many home care workers prefer to stay with one client
per week as well.
Another witness testified that the rule will result in various
compliance difficulties. According to his testimony, the rule
will require individuals to keep track of the activities any
caregivers perform to ensure such activities do not
"effectively convert friendship into employment."
He called for more comprehensive guidance to address when a casual
caregiver becomes an employee under this rule. The witness
noted in recent years the DOL has diminished a for-profit
employer's ability to use unpaid volunteers or interns, and
that it would not be out of the question for the DOL to extend its
definition of "employee" to friends or neighbors who
provide occasional home care assistance.
Ranking subcommittee member Joe Courtney (D-CT) also spoke in
support of the rule, stating that its purpose is to "ensure
nearly two million home care workers get paid the minimum
wage." Similarly, witness Karen Kulp, President of Home
Care Associates, said the rule "recognizes the
professionalization of this industry."
Despite the concerns raised by the other witnesses, Rep.
Courtney dismissed the prospects for repealing the rule, confirming
that the Department of Labor would not rescind the new
Effective January 1, 2015, certain employers became subject to the employer mandate of the Patient Protection and Affordable Care Act, and thus subject to liability under the ACA Employer Shared Responsibility provisions.