Opposechangesto the Companionshipservicesexemptionto Thefairlaborstandardsact

OPPOSECHANGESTO THE COMPANIONSHIPSERVICESEXEMPTIONTO THEFAIRLABORSTANDARDSACT

ISSUE: In 1974, Congress established an exemption for companionship services from the Minimum WageandOvertimeRequirementsoftheFairLaborStandardsAct. Congress madeasocietalchoiceinbalancingtheinterests oftheworkerrelativetotheneeds for caretotheelderlyandtheinfirm. Current law provides the Secretary of the U.S. Department of Labor (DOL) the authority to define and determine the scope of the companionship exemption.

In June 2007, the US Supreme Court ruled that the DOL companionship services exemption regulation was valid thereby reversingtheCourt ofAppealsina final decision.

SincetheSupremeCourt ruling,there hasbeenare-focusingofeffortsbysomeopposedtotheDOLrule.Currently,theyareattemptingtogetCongresstochange the law while also seeking legislative and/or regulatory remediesatthestatelevel. Legislative efforts in the 110th, 111th, and 112th Congresses intended to eliminate the current companionship services exemption for home care aide workers are opposed by the National Association for Home Care & Hospice (NAHC) because they do not go far enough to protect workers.

Some states already have passed laws thateliminated the companionship services exemption. In others, there are efforts to interpret the regulationsinamannerdifferentthan the federal rules.

Advocatesforchanging theexemptionhaveexpandedtheireffortswiththeObama administration to encourage DOLtochangetheregulation.These effortsincludeenlistingtheaidof15Senatorstosendaletterto theSecretaryofLabor requestingthattheexemptionbemodified through regulationto excludehomecare aides employedbyagenciesorfamilyoftheclient. DOL issued a proposed rule on December 27, 2011 that would significantly restricttheexemptionandmakeitinapplicable toworkersemployedbyhomecare companies. The proposed rule was made final on October 1, 2013 with an effective date delayed until January 1, 2015, 78 Fed. Reg. 60453 (October 1, 2013). In the absenceofamandate thatgovernmentpaymentprogramsincreasepaymentrates tocoverthe added costofwages thatwouldresultfromthese efforts,homecareaideemployers areexpectedtorestrictworking hours to avoid overtime pay. Further, these efforts do nothing to create career opportunities for home care aides or to address theirneedforhealthinsurance. This isolated action related to a single elementof thehomecareaideworkingconditionswillhaveareversenegative impactonthoseworkers.

Legislation has been introduced in the 112th Congress that is intended to codify the current definition of companionship services. NAHC supported the “Companionship Exemption Protection Act” (H.R.3066) because it creates certainty for home care providers and patients rather than leaving the definition open to changes through the regulatory process.

RECOMMENDATION: A companionship servicesexemptionunderwageandhourlaws should be restored at the state and federal level until a comprehensive plan can be implementedthataddressesservicefunding,workerhealthinsurance,andcareerdevelopment. Congress should reversetheDepartmentof Labor rule change that effectively eliminated the applicationofthecompanionshipservicesexemption to home care. Alternatively, Congress should ensure that government-funded home care programs adequately reimburse employers for added costs of overtime compensation and provide financial protection to consumers of private pay services through tax credits or other subsidies.

Finally, Congress should enact reforms to the FLSA that establish a reasonable compensation structure for home care that respects the uniqueness of that employment setting where the patient/client is the primary focus of responsibility. That reformed structure should also properly address the unique aspects of “live-in” care where employees reside in the home of the client, receive room and board, and take on caregiving responsibilities throughout a 24 hour day.

RATIONALE:Mosthomecareprovidersaresmallbusinesseswithlimitedresources.The companionshipexemptionresultwouldbetoreducetheavailabilityofcaretotheelderly andtheinfirmandtoincreasethecostsofservicedeliverywithnocorrespondingincrease from thirdpartypayers, such asMedicaid. A comprehensive,rather than apiecemeal approach toworkercompensationandworkingconditionsisnecessaryifaccess tohigh qualityofcareandcontinuityofservicesistobeachieved. Also, the unique employment nature of home care warrants a tailored approach to wage and hour requirements that takes into account that the focus of the employment is a population of vulnerable and infirm elderly a persons with disabilities in their own homes.