On Dec. 27, 2011, the Department of Labor issued a Notice of Proposed Rulemaking to Amend the Companionship and Live-In Worker Regulations that would require agencies to pay a higher wage, typically 1½ times the regular rate, for any time that employees work more than 40 hours in a week.
While minimum wage is certainly necessary, a cost/impact study released by the International Franchise Association (IFA) in March suggests the proposal’s costs would far exceed its alleged benefits.
If passed, the legislation could drive up costs and disrupt service to many seniors, especially those who need 24/7 care (most likely making it unaffordable to seniors and agencies alike). To avoid overtime, employers would likely have to cut caregivers’ hours and possibly perform layoffs.
On Aug. 21, I travelled to Washington, D.C., as part of a delegation to attend the Department of Labor’s meeting on the Companion Exemption proposal. I was joined by Gail and Randy Stathers, owners of Home Helpers of Yorktown, VA, as well as several members of the IFA, the National Private Duty Association (NPDA) and representatives from the home care franchise sector.
I addressed the topic of keeping quality home care affordable for our nation’s seniors and those requiring daily assistance, citing that:
- One in 10 clients require 24/7 care, while another 25% need more than 40 hours a week. This would trigger the overtime pay called for by the new legislation, thus increasing costs to the client by approximately 20%.
- Unfortunately, the majority of seniors wouldn’t be able to afford that. In 2008, the median income was $25,000 for older males, and $14,000 for older females. Approximately 87% of them utilize Social Security.
- Despite the fact that nine out of 10 seniors prefer to age in place, many families would be forced to seek alternative, potentially sub par care for their loved ones via “underground” services, or to seek institutional care, which can be approximately 60% more expensive than home care.
As currently written, the legislation could cause significant disruption to the continuity of care that is critical to a person’s health and wellbeing.
According to IFA Vice President of Government Relations & Public Policy Jay Perron, “This is a solution to a problem that does not exist and will only harm those who need companion care the most, our nation’s seniors.”
If you have not already done so, I encourage you to reach out to your local Congress members and voice your opinion on this issue, and I will continue to post updates as I learn more.