Minimum Wage Protections for Home Care Workers

Rohan Mascarenhas, Russell Sage Foundation
December 15, 2011

The Obama Administration will call for home-care aides to receive minimum wage and overtime protections under the Fair Labor Standards Act, according to a report in today's New York Times. If approved, the policy change could affect salary levels and job conditions for the nation's 1.7 million in-home direct care workers.

The Russell Sage Foundation currently sponsors a working group on care work in America that examines how care (child care, elder care, care for the disabled) is provided to dependent populations in the United States today. As part of the effort, the Foundation supported several policy briefs in partnership with the Direct Care Alliance, which has pushed to end the exemption of home workers under the FLSA. Peggie Smith, a law professor, explained in one such paper why Congress sought to limit the reach of the FLSA in 1974, and why its justification does not make sense in today's world:

The legislative history of the 1974 amendments indicates that Congress, in exempting companions, intended to exclude those individuals who, like occasional babysitters, worked in a casual, non-professional capacity for a private household. The prevailing image of a companion was a neighbor or a friend who spent time with an elderly person and who, because she was not a regular breadwinner, did not require the protection of the FLSA. Thus, as explained by Senator Harrison Williams, the primary sponsor of the amendments, the companionship exemption was intended for "'elder sitters' whose main purpose of employment is to watch over an elderly or infirm person in the same manner that a babysitter watches over children."

Today, however, most home care workers are employed by health agencies and work on a full-time, regular basis. The situation is unlikely to change soon: by 2030, Americans aged 65 and older are expected to account for a fifth of the population. At the same time, the National Family Caregivers Association predicts potential family caregivers for each person who requires care will decrease from 11 in 1990 to 4 in 2050. This shift explains why demand for formal care has sharply increased. The Bureau of Labor Statistics predicts personal and home care aides will comprise nearly 38 percent of the growth—that is, 375,000 jobs— in personal care and service occupations over the next ten years.

Unfortunately, job conditions are not ideal in the industry, as Laura Dresser and Adrienne Pagac report in another RSF-sponsored brief. The median wage in 2009 for in-home direct care workers was $9.50, below the national median of $15.95. (See Table 3, taken from their report, below.) "Providing just over $19,000 in annual income (in the unlikely case where the job offers full-time year-round employment)," Dresser and Pagac note, "these jobs can't keep a family of four out of poverty." In addition, just 24 percent of in-home workers with at least half-time year-round work receive health insurance through their employment. Only one in 10 home health workers participate in an employer pension plan.

Those who oppose extending FLSA protection to home care workers say the move will raise costs for home care. In her brief, Smith offers four responses, which I have summarized below:

• Several states already include home care workers within their own state wage and hour laws, and there is no evidence these protections have adversely affected the provision of long-term care.
• Adding protections may reduce turnover among home care workers. The average cost to replace a direct care worker range from $4,200 to $5,200.
• Substandard wages may force home care workers to rely on public assistance. Compared with other workers, home care workers are twice as likely to rely on public assistance programs to sustain themselves and their families.
• Improving protections may lower the number of home care workers who leave the industry due to poor job conditions.

You can read these papers and more in RSF's Care Work research section. I have included an especially relevant report—"Minimum Wage Protections for All?"—below. The paper looks at previous efforts by the Department of Labor to change the exemption clause, as well as the reactions that were filed during the 60-day public comment period.

Minimum Wage Protection for All


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