Home healthcare workers work long hours for low pay. They are among the lowest paid employees in our workforce. Unfortunately, they are often exempt from both the minimum wage and overtime requirements of the FLSA. The reason is an accident of history. Thankfully, help may be on the way.
It is important to note that home healthcare workers are not underpaid because the industry is broke. In 2009, the home healthcare industry had $24 billion in profit. That’s not revenue; that’s profit. They are among the five fastest growing industries in the country.
Originally, the home healthcare workers’ exemption – known as the companionship exemption – was created for “companions.” In other words, Congress did not want grandma to have a heart attack while she was alone at home. Therefore, Congress thought it would be a good idea to encourage grandma to pay somebody to sit on the couch and watch General Hospital with her. These were companions. However, when Congress passed the exemption, they gave the Department of Labor authority to interpret “companion.”
The Department of Labor expanded the definition to include workers to perform certain domestic services. The United States Supreme Court reviewed this interpretation and hinted it was a little quirky, but still deferred to the Department of Labor.
At last, the Department of Labor has now proposed new regulations. While the final version is not out, the drafts did three important things: (1) they said that general household work was not included in companionship; (2) they excluded providing medical care as companionship; (3) they created a rule that no more than 20% of companions’ time can be used performing non-companionship services; and (4) they specifically provide that employees of third party home health agencies are not exempt.
The fourth provision is especially important. For-profit companies who make a great deal of money providing “companionship services” frequently rely on the FLSA exemptions. They rake in tons of revenue while paying employees a pittance.
The notice and comment period of the new regulations closed in 2012. We are just waiting to see if the Department of Labor will adopt them. We hope they will come out in April or May of 2013. In the interim, there is at least a bit of hope on the horizon for “companions” of the elderly.