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. 

 

Comments

"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." If they are making $20,000/year they are being paid $10/hour which is above minimum wage. Time, travel, etc are never factored in by the employer when figuring out wages. I don't pay someone more who has to travel 20 miles, nor do I pay someone less who lives down the street. That's a decision the employee makes - is it worth it?

Basic economics and common sense shows that minimum wage does impact employment. As an employer, if minimum wage goes up, first off I may not be able to employ as many people. So instead of 100 employees, now I have 96. For those four employees their minimum wage became $0. Secondly as an employer I have a certain level of expectation based on the wage. At $5/hour I may be willing to hire a young kid without a lot of experience but at $10/hour my expectations of what I'm paying for go up, and now that kid without a high school degree no longer has a chance.

Again, basic economics. If the cost of employing these people goes up, what's going to happen? There will be fewer of them employed because some folks who currently employ a helper will not be able to afford them. Or they will pay them under the table and eliminate the agency. Also, some of the people who do this now will be replaced because, due to the higher wages better people will come into the field. So someone loses their job because their services aren't worth the higher price.

I know that economics, human behavior and secondary consequences aren't things you like to consider in your world, but you should because you and I and everyone else has to deal with them every day. And no matter how much you wish they would go away, they won't.

Of course, you could always hire illegals and a pay less than minimum wage. The extra profit could then be contributed to the local GOP.

Lets get a few things clear:
1.The numbers this author cites about the “booming” industry are totally misleading because those numbers combine the home health care industry with the home care industry. They are two very different industries. Home health care is paid by insurance, while home care is an out of pocket expense for the client. Home health care will be minimally impacted by the elimination of the companionship exemption. Home care will be massively impacted. Home health care has grown very rapidly, while home care has seen very small growth in the last few years due to the recession- people are struggling to afford it.
2.Growth in the home care industry is not due to massive profit margins. The growth has been driven by tremendous demand from America’s rapidly aging population for home care, and the fact that home care is relatively affordable for much of that population.
3.Minimum wage is NOT the issue. In CA (where I live and work) caregivers starting pay is 50% above CA minimum wage.
4.Mandated overtime pay is the issue. Specifically, OT is an issue for home care clients who require live-in care to remain living at home.
5.The current exemption does not include “extensive housework responsibilities”. In fact, if a caregiver spends more than 20% of their time doing work not directly related to caring for the client, then the caregiver is not exempt from minimum wage and overtime by law.
6.The elimination of the companion exemption will increase the out of pocket costs by two and a half to three times what it currently costs a client today for the same service. In CA that translates to well over $20,000 per month- totally unaffordable for all but the ultra wealthy. Those numbers are fact: minimum wage + OT +Double Time.
7.Even replacing a current live-in schedule with 3 caregivers working 8 hour shifts a day at minimum wage (to avoid overtime charges) would still cost the client $3,500 more a month than they currently pay for live-in care. This scenario would also drastically reduce the caregivers’ wages from what they are paid today as they would be capped at 40 hours a week.
8.If people can no longer afford a service, then the job providing that service will not exist- except in the underground economy where the caregiver and the client are both vulnerable and at risk.
9.In the "15 states that already extend state minimum wage and overtime protections to some or all home-care workers" nearly all of those states have some type of carve out for caregivers. CA is one of those "15" states and we have the "personal attendant" exemption under wage order 15 which does infact exempt the caregiver from minimum wage and OT.

Many caregivers become isolated when the patient requires a great deal of care. Isolation causes stress and can produce mental and physical health problems.

being a caregiver needs great dedication for your work because the nature of help others and serve other can only lead you to become a caregiver. caregivers are those who provide home care and always do hard work and try to provide more and more love and care to your loved ones when you are unable to do so, so they should be paid fair enough for the appreciable work they are doing from their heart.

In the process of serving and helping others, caregiver stops living their own life, but still they are not paid well.
The goverment must be responsible for keeping the rights of a caregiver and they should provide the salary what they deserve.
Money is a big support for all, and for caregivers too.
Reference: Private Home Care Firm

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