Home Health & Hospice Week

A controversial labor law issue put to rest by the U.S. Supreme Court two years ago has risen again -- and it could cost you.

Fifteen Democratic senators have written a letter to new Department of Labor Secretary Hilda Solis, asking the DOL to reinterpret the companionship exemption under the Fair Labor Standards Act.

FLSA governs minimum wage and overtime rules for workers.

Background: Two years ago, the Supreme Court upheld a DOL interpretation of FLSA which exempts companion workers for the elderly from minimum wage and overtime laws (see Eli's HCW Vol. XVI, No. 22, p. 162). That exemption applies to workers employed by a third party, such as a home health agency, the decision noted.

Now the influential senators, including Tom Harkin (D-Iowa) and Edward Kennedy (D-Mass.), want the regulation changed. "We strongly urge you to use [your] broad authority to issue new rules that cover home care workers under the FLSA to ensure that home care workers have the same protections other workers enjoy," the senators say in the letter to Secretary Solis. "Congress enacted the narrow 'companionship services' exemption to address concerns that the FLSA would be extended to cover services teenagers, friends and neighbors provided occasionally or informally, such as a babysitter. A professional caretaker is simply not the type of informal and casual relationship that Congress sought to exempt."

Solis has indicated that the Obama administration is open to the change. "As secretary of labor, I intend to fulfill the department's mandate to protect America's workers, including home health care aides, who work demanding work schedules and receive low wages," Solis said in response to the letter, according to the Associated Press.

Impact: If the Obama administration moves ahead with restricting the exemption, the impact will be "huge," notes attorney Liz Pearson with Pearson & Bernard in Covington, Ky. Exemption from the minimum wage and overtime rules is the only way many agencies are able to participate in lowpaying state home care programs, Pearson tells Eli.

"I fear many would have to pull out of those struggling programs ... if the exemption is taken away."

For most agencies, it's not the minimum wage standard that's the problem, notes labor law attorney John Gilliland II with Gilliland & Markette in Indianapolis. Many home care aides already receive minimum wage or higher. Instead, it's the overtime pay that would be most punishing without the exemption.

"Significant negative impact ... would occur across the nation if all agency-employed home care aides were to become eligible for overtime compensation," warns the National Association for Home Care & Hospice. "The impact ... would affect the elderly and the disabled as well as the home care aides and their employer agencies."

Bottom line: Federal and state programs simply do not cover the increased costs of providing overtime pay or expanding staff size as a means to control overtime, NAHC argues.

Unlike with the earlier court challenge and subsequent legislative efforts that failed, proponents of the change are now attempting to secure it via administrative means, Gilliland points out. But they are likely to encounter stiff opposition from the home care industry, small business advocates, and state programs that can't afford to fund the overtime.

Those who want to eliminate or restrict the exemption are looking at the issue from purely a labor law standpoint, Gilliland observes. They need to realize that it also affects whether Americans can obtain affordable health care, which is a big goal under the Obama administration.

Increased consumer and government costs as a result of the proposed change could be as high as 26 percent, notes the National Private Duty Association in a white paper on the topic. For private duty agencies, it's seniors who will bear the brunt of the increase, NPDA's Kim Stoneking tells Eli.

The change also will come back to punish many of the aides it's trying to help, Gilliland believes. In states that already have overtime laws that apply to aides, HHAs generally offer to let the client pay for the overtime or restrict the workers' hours to 40 per week to avoid triggering the over time rate. Since most clients decline to pay for overtime, the result is that workers have their hours, and resulting income, reduced, Gilliland says.

This also results in losing consistency of care due to multiple caregivers, Stoneking points out. And home care aides get spread thin by working for two or three different agencies to make up for their lost hours and income.

"Our members are very concerned," Stoneking tells Eli.

Stay tuned:While DOL Secretary Solis has indicated a willingness to consider the change, the department hasn't set any sort of timeline or proposed any regulation change related to the matter, AP notes. Stoneking expects activity on the matter to pick up steam toward the end of this year or perhaps in 2010.