Obama to extend wage law to cover 2 million home care aides

Aides will be covered under U.S. Fair Labor Standards Act in Jan. 2015
By Amanda Becker
|payroll-reporter.com|Last Updated: 09/18/2013

WASHINGTON (Reuters) — The Obama administration will extend the protection of U.S. minimum wage and overtime law to almost two million home health workers who assist the elderly and disabled, setting an assertive tone for the new U.S. labour secretary.

Sworn in only two weeks ago, Thomas Perez said in a statement that home health workers provide "vital services."

"Today we are taking an important step toward guaranteeing that these professionals receive the wage protections they deserve while protecting the right of individuals to live at home," he said.

Under a new rule, the department said home health workers, personal care aides and certified nursing assistants will be brought under the coverage of the U.S. Fair Labor Standards Act starting in January 2015.

The department began moving toward adoption of a final rule along these lines almost two years ago, but its announcement was the first substantive policy pronouncement by Perez, who endured a contentious confirmation process in the U.S. Senate.

The U.S. Labor Department estimated that in the United States there are 1.9 million home-based "direct care" workers, who are typically employed by healthcare agencies. Their median pay in 2010 was $9.70 per hour, or about $20,000 per year.

About 90 per cent of them are women and nearly half are minorities. The federal minimum wage is $7.75 per hour.

In December 2011, the Labor Department proposed revising the definition of "companionship services," which are exempt from federal minimum wage and overtime protections, to exclude home healthworkers.

The proposed rule followed a 2007 U.S. Supreme Court decision in a case brought by Evelyn Coke, a home health worker in Queens, New York. The justices determined that the Labor Department's exemption of so-called companionship workers from the federal wage law included health workers like Coke.

When the department responded to the ruling and moved to redefine companionship care, congressional Republicans warned it would result in workers getting fewer hours and make it too costly for patients to remain at home.

Perez said in a conference call with reporters that these concerns were not borne out by outcomes in states that have already extended their wage-and-hour laws to direct-care workers in homes.

Twenty-one states and the District of Columbia extend state minimum wage laws to home healthworkers. Fifteen of those also grant such workers overtime benefits.

It is "unfair" to lump these professionals into a category intended for "teenage babysitters," Perez said on the call.

Workers who are employed directly by an individual or family to provide "fellowship and protection," such as companionship in a home setting, are exempt from the rule. Workers employed by an individual or family to perform medical tasks will be covered.

Democratic lawmakers, advocates and labor leaders praised the adoption of the final rule.

Henry Claypool, executive vice president of the American Association of People With Disabilities, said it will address an "institutional bias," and enable home workers to reach wage parity with those performing the same tasks in medical centers and other facilities.

The leader of the AFL-CIO, the largest federation of U.S. labour unions that represents more than 13 million workers, said after Tuesday's announcement that workers like Coke should be covered by the country's "most basic labour standards."

"Congress intended that these hard-working individuals, whose labour is often physically and emotionally demanding, have the protection of our nation's most basic labour standards," AFL-CIO President Richard Trumka said in a statement.

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