On Tuesday members of the House Committee on Education and the Workforce’s Subcommittee on Workforce Protections heard competing testimony about the merits of the Department of Labor’s proposed rule that would extend minimum wage and overtime requirements to many home care workers. This proposal would amend the Fair Labor Standards Act’s (FLSA) companionship and live-in worker regulations to limit the types of duties that render a home caregiver exempt from FLSA requirements, clarify the type of activities and duties that may be considered “incidental” to the provision of companionship services, amend the recordkeeping requirements for live-in domestic workers, and specify that the exemption is limited to care givers employed by the individual, family or household using the services only. While proponents of the rule discussed the need to update the Wage and Hour Division (WHD) regulations to address the needs of this changing industry sector, others criticized the impact the rule would have on the quality and availability of elder home care, challenged the legality of changing the FLSA’s exemption, and questioned the thoroughness of the WHD’s economic analysis of the potential costs involved.
Kicking off the hearing – Ensuring Regulations Protect Access to Affordable and Quality Companion Care – Subcommittee chair Rep. Tim Walberg (R-MI) stated that the proposal runs contrary to decades of established law, and claimed that given the proposed changes to the definition of companionship services, “only employees who follow a rigid set of arbitrary steps would qualify for an exemption.” Walberg also took issue with the fact that the proposal eliminates the exemption for companion care workers employed by a third-party.
William A. Dombi, Vice President for Law with the National Association for Home Care & Hospice, echoed this sentiment, testifying that the proposal raises several legal issues. Namely, he stated that the proposal runs contrary to FLSA language by excluding third-parties from the exemption and limiting “companionship services” to fellowship-type services.
With respect to excluding third-party employers from the exemption, Dombi testified that this proposal:
is in direct contradiction to the language of the FLSA and the position advanced by the Department of Labor at the US Supreme Court in Long Island Care at Home v. Coke. The law applies the exemption to “any employee.” The Department relied on this language in defending its current regulations at the Supreme Court in 2007. The exemption is not limited to the infirm that have the wherewithal and financial capabilities to take on the difficult tasks required of employers.
In addition, he testified that the FLSA applies the exemption to employees providing “companionship services for individuals who (because of age or infirmity) are unable to care for themselves.” According to Dombi, the statutory language focuses on the provision of care, not fellowship, and that by changing the definition of companionship services the proposed rule “guts the companionship exemption,” a move that “has no basis in the law’s legislative history.”
Cathy Ruckelshaus, Legal Co-Director for the National Employment Law Project, disagreed with Dombi’s legal assessment of the exemption’s legislative history. She testified that the original statute did not define what companionship services meant, and that lawmakers intentionally left it to the DOL to define its parameters. According to Ruckelshaus, the DOL did so in 1975 when it crafted the companionship exemption, but that this exemption was intended to be narrow. She claimed that Congress at the time meant to exempt elder sitters, not those who performed more specialized care such as catheterization. Ranking member Lynn Woolsey (D-CA) agreed that the tasks of home care workers today “far exceed” the types of fellowship services that the exemption was designed to address.
Nancy J. Leppink, Deputy Administrator of the WHD, further explained that when the exemption was implemented, the role of home care workers was more of an avocation performed by friends and family members, and that times have since changed. According to Leppink, while the home care industry has grown, the wages of such workers have not, and are among the lowest in the service industry.
Legislative intent aside, several lawmakers and panelists disputed the DOL’s cost estimates contained in the proposal. According to Rep. Walberg, the cost of the companion care could increase to more than $2 billion over the next 10 years. He claimed that the DOL’s economic analysis of the rule’s costs is based on incomplete data, and that the agency understated the economic impact that would result from the promulgation of the rule. Walberg submitted into the record a survey conducted by the International Franchise Association Educational Foundation, which found that the actual costs of the rule would be much higher than anticipated.
Dombi agreed that the DOL’s economic analysis “falls far short of that required.” He asserted that the DOL did not take into consideration the costs of privately-purchased personal care, and is also “devoid” of any analysis of live-in services. Dombi also charged that the DOL’s reliance on Medicaid and Medicare data is flawed. Overall, he testified that the rule will result in a “moderate to significant” increase in costs, loss of service quality and continuity, and an increase in costs to consumers.
Leppink challenged the claim that the costs of the rule would be that significant. According to her estimates, the cost to employers would be $4.7 million over a 10-year period, and that the increase in companionship costs will not exceed $2 billion, as Chairman Walberg claimed. According to her testimony, the rule represents “a modest proposal to extend significant economic protections to this workforce.” She noted that 16 states already require both minimum wage and overtime for companionship services, and another 5 require the minimum wage. Ruckelshaus claimed that the existence of these state laws “demonstrates the economic feasibility” of the proposed rule.
Leppink acknowledged, however, that the increase in required wages could result in a “temporary” decrease in wages for some home care workers if employers decide to do so.
A complete list of panelists and links to their testimony can be found here.
Photo credit: AlexRaths