At a Senate Appropriations subcommittee, Secretary of Labor Hilda Solis was questioned by Senator Lamar Alexander (R, Tennessee), concerning the proposed new rule from the US Department of Labor, eliminating the companionship overtime exemption.
His questions are absolutely on target, concerning the impact that the new proposed rule would have. Unfortunately, Secretary Solis’ response is not so much.
Please watch the video on YouTube. This is such an incredibly important issue for seniors and others who need home care, as well as to the incredible professional caregivers who provide it.
The National Private Duty Association has summarized the issues very well:
- It will result in lower pay for caregivers because clients cannot afford to pay overtime and so hours will be restricted. Caregivers employed by private duty companies currently earn fair compensation—on average, well more than minimum wage.
- It will hurt the continuity of care for fragile seniors and people with disabilities who would struggle with having to adjust to a greater number of people coming into their homes and attending to their personal needs.
- It will force unwanted institutionalization for people who will no longer be able to afford the in-home non-medical care they need to remain in their own homes.
- It will significantly increase federal and state government spending as costs to Medicaid and other government programs would go up, both from an increase in compensation to in-home caregivers, and from increased government-subsidized institutionalization.
- It will encourage an underground “grey market” as people in need seek less expensive—but untrained and unsupervised—workers who will not operate within the rules of the FLSA.
- It will result in reduced federal and state revenues from unpaid taxes because these underground workers will not be employees and will likely not even know about much less comply with their federal and state tax responsibilities.
- It will hurt the small businesses that employ trained, supervised, professional caregivers, causing some companies to go under and many to struggle—it will cost jobs as a result.
- It could virtually eliminate the option of live-in companion care for persons with disabilities and seniors because of the significant additional costs and recordkeeping burdens imposed by the NPRM.
The public comment period for the proposed new rule ends tomorrow. If you can, please add your comments, by clicking here.
Best wishes. Bert