Hard Work Doesn't Pay for Home-Care Workers

Say you’ve got a booming industry, one that already employs 2 million workers in the U.S. and is poised to add 1.3 million additional jobs by 2020. Imagine that the jobs cannot be off-shored, that the work helps decrease federal deficits, and millions of Americans depend on the industry just to get through their daily lives.

Now ask yourself: Should it be legal to pay the workforce of this thriving and essential industry less than the minimum wage?

Currently, it’s perfectly licit. A loophole in the Fair Labor Standards Act of 1938 exempts home-care workers—employees who provide personal care to the elderly and disabled in their homes—from basic work protections like the minimum wage and overtime pay. The rationale, according to the National Employment Law Project (NELP), was that people providing “companionship services” to seniors and people with disabilities were like casual babysitters.

But this exemption, NELP points out, was never meant to include the extensive housework responsibilities or physically demanding labor of bathing incapacitated clients and helping them use the bathroom that make up a substantial portion of home-care workers’ jobs today. And the image of a neighbor paid to come by occasionally and sit with an elderly parent bears little resemblance to today’s home-care economy, in in which 70 percent of home-care workers are employed by agencies and for-profit corporations dominate the industry. Now, as profits in the home-care industry climbed 9 percent a year from 2001 to 2009, the “companionship exemption” has become a means for companies to avoid fairly compensating workers, who typically earn just over $20,000 a year for full-time work and whose wages may fall below the minimum when time and money transportation clients or traveling between one client’s home and another are factored in.

The Department of Labor agrees that home-care exemptions must be updated. In December, the DOL issued a proposed rule extending basic labor protections to home-care workers. President Barack Obama hailed it as a way to “help make sure that hard work pays off."

But now, as the Department of Labor prepares to officially issue its final rule on home-care workers, opposition from companies profiting from a low-wage workforce has mounted. Since it’s hard to argue outright that the woman (92 percent of the affected workforce is female, half are people of color) who helps Great Aunt Edna get out of bed every morning shouldn’t earn enough to feed her own children, the case against fair pay for home-care workers has relied on zero-sum analysis pitting seniors against their own caregivers in a fight over scraps. If home-care workers are extended the same fundamental protections that other American workers enjoy, argue industry lobbyists, the corporations that hire them will go under, seniors will be forced into nursing homes, and home-care workers will lose their jobs. In other words, the fastest growing jobs sector in the country can only continue to function as a perpetually low-wage preserve.

These critics are recycling the same discredited arguments used against the minimum wage and the Fair Labor Standards Act 70 years ago. Yet neither of these policies destroyed jobs or created the predicted “chaos in business.” In fact, the experience of 15 states that already extend state minimum wage and overtime protections to some or all home-care workers suggests that impacts on companies’ viability and the affordability of care will be minimal. The National Employment Law Project points out that there is no data showing that states with minimum wage and overtime protection for home-care workers have higher rates of institutionalization for seniors or people with disabilities. In fact, the elderly and disabled benefit from the lower rates of turnover and greater degree of professionalism possible when their caregivers are fairly compensated.

In a larger sense, we all benefit from the extension of basic labor protections to home-care workers. By effectively raising pay for some of the nation’s worst paid workers—primarily women who will quickly spend any additional income to support their families—the proposed rule will provide an economic boost, helping to promote recovery for the nation as a whole. At the same time, the proposed rule makes a powerful statement that the people who care for our frail and elderly do real work and merit the protections the rest of us count on. 


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