Labor Department Delays Enforcement of Home Care Pay Rules

On Tuesday, the Department of Labor announced that it will not enforce a final rule that will extend minimum wage and overtime pay protections to home care workers until six months after it takes effect on Jan. 1, 2015, the New York Times' "Business Day" reports.

Background

According to the Department of Labor, nearly two million home care workers and personal care aides do not always receive overtime pay or receive minimum wage because of exclusions to a federal wage law meant for casual babysitters and companions for individuals who are sick or have disabilities (Greenhouse, "Business Day," New York Times, 10/7). That figure includes about 360,000 home caregivers employed by California's In-Home Supportive Services program (California Healthline, 9/18/13). The plan also narrows the definition of "companionship services" and clearly outlines what duties qualify for overtime pay, such as medically related tasks that typically require prerequisite training (Dickson, Modern Healthcare, 10/7).

Specifically, the rule requires all home care workers to receive at least the federal minimum wage, which is $7.25 per hour. The rule also requires that home care workers receive time-and-a-half pay for any hours beyond 40 hours per week ("Business Day," New York Times, 10/7).

Delay Details

The rule will still take effect on Jan. 1, 2015, but the department will not begin enforcing the rule until June 30, 2015. In addition, the department said it would "exercise its discretion" on whether to take action against employers not complying with the rule during the last half of 2015.

However, the department said it would give "strong consideration" to the steps states and other stakeholders have taken to implement the changes and whether they have made a good faith effort to comply with the rule in such cases.

The department in the announcement said, "We have consistently emphasized the importance of implementing the rule in a manner that both protects consumers and expands wage protections for direct-care workers," adding, "We believe this non-enforcement policy will help achieve both of those goals" (Modern Healthcare, 10/7).

The agency said that it would work with states throughout 2015 to help them implement the changes (Raum, AP/U-T San Diego, 10/7).

Reason for Delay

The enforcement delay comes after various states pushed back against the rule change, saying it would increase their Medicaid costs. For example, officials in Illinois said the change would mean more than $32 million in additional costs for its 10,000 home-care workers, while California said the change would increase its costs by more than $600 million annually ("Business Day," New York Times, 10/7). In addition, state officials said that change could cause staffing shortages (Modern Healthcare, 10/7).

The home care industry expressed similar concerns, adding that the costs may mean families would no longer be able to afford home care and would force more individuals into nursing homes.

Reaction

Home care worker advocacy groups criticized the delay. Paraprofessional Healthcare Institute President Jodi Sturgeon said the "delay means that two million home care workers -- largely low-income women and disproportionately women of color -- will have to wait as long as another 12 months to receive even the most basic labor protections, guarantees that most other American workers take for granted" ("Business Day," New York Times, 10/7).

However, some stakeholders applauded the move as a balanced approach to implementing the change. Senate Committee on Health, Education, Labor and Pensions Chair Tom Harkin (D-Iowa) in a statement said the department conducted "a tremendous amount of outreach to affected stakeholders, and is clearly taking careful steps to implement these changes in a thoughtful and balanced manner that will ensure a smooth transition" (Trottman, Wall Street Journal, 10/7).