Taking Care of those who Care for our Parents

In mid-December, the Obama Administration proposed regulations to give home care workers the protection of the Fair Labor Standards Act as it relates to minimum wage and overtime pay. 

According to industry figures, most workers in this field earn between $8.50 ad $12.00 per hour, as compared to the federal minimum wage of $7.25 an hour. However, unless they are covered by their state’s wage and hour laws, the vast majority of these workers do not receive time-and-a half when they work more than 40 hours.  Almost 40% of these workers (most of whom are single women) receive food stamps or other government assistance.

Opponents of the rules assert that agencies will have to charge more, and some clients may experience the disruption of more caregivers, rather than one or two with whom they can develop a relationship. And to the extent these services are covered by Medicare or Medicaid, the change will cause those costs to increase.

Caregivers who are employed directly by individuals to serve as companions would still be exempt from these rules, which means that an unintended consequence of this change could be that more families will hire private caregivers directly, rather than working through agencies.  These workers won’t even have the protection of workers’ compensation insurance and an employer to contribute to their payroll taxes.  And the customers will not have the protection of background checks and drug testing that the agencies often require.

The proposed rules may be changed after the 60-day comment period, which ends on February 15, 2012.

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