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Home Care Industry’s “Companionship Exemption” Studies Seriously Flawed

PHI, the Paraprofessional Healthcare Institute, says that the US Department of Labor’s (DOL) proposal to extend 2.5 million home care workers minimum wage and overtime protections under the Fair Labor Standards Act (FLSA) will strengthen the infrastructure for home and community-based services, assuring access to affordable, quality care.

The DOL proposal to revise the “companionship exemption” under FLSA finally recognizes the formalization of the home care industry – now a thriving $84 billion industry – and the professionalization of the workforce, since home care workers were first excluded from the federal labor law in 1974, says PHI in a statement submitted to the Workforce Protections Subcommittee of the US House of Representatives Education and the Workforce Committee.

The statement was released at a committee hearing on “Ensuring Regulations Protect Access to Affordable, Quality Companion Care.”

“Home care is the nation’s fastest-growing occupation, expected to grow to over 3 million workers by 2020. Yet these workers, who are 90% female with a median age of 45, continue to be treated in the same fashion as teenage babysitters. Home care, however, is a true vocation, and should be treated as such under the law,” the statement says.

“The millions of women who provide these services are no different from those who work in similar jobs in nursing homes and assisted living facilities. There is absolutely no justification for continuing to treat these workers as casual companions, exempting them from basic labor protections that most American workers have enjoyed for over 70 years.”

After conducting its own analysis, PHI found that, “recent industry studies suggesting that the proposed regulations will have a negative impact on businesses, consumers, and workers are seriously flawed.”

For example, two industry-funded surveys were neither nationally representative nor statistically valid. The surveys emphasized opinion questions that are phrased to lead respondents to answers that align with the associations’ opposition to the proposed regulations. Finally, an industry-funded economic analysis of the impact of the proposed regulation uses a purely theoretical framework to support its conclusions. It fails to acknowledge that the ultimate costs of the regulatory change will be driven by how those agencies that are not already extending overtime protections to their aides respond to new payment requirements not by assigning time and a half pay to current overtime hours.

PHI research shows that:

  • The home care industry has doubled its revenues over the last decade and the for-profit segment is making healthy profits;
  • Less than 10% of the workforce reports working overtime, making it unlikely that overtime costs will significantly increase costs for businesses or the clients they serve; and
  • In the 15 states that already require agencies to pay minimum wage and time and a half for overtime, home care agencies remain successful enterprises.

“Our analysis of nationally representative survey data aligns with the conclusions of the US Department of Labor—the economic impact of the proposed changes would be relatively small and would have little impact on the affordability of services for consumers.”

Visit the PHI Campaign for Fair Pay for a full critique of the home care industry reports, as well as other resources, including the

Source: PHI

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