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DOL Finalizes Companionship Rule

With little notice, on September 17, Labor Secretary Thomas Perez finalized a rule to extend the Fair Labor Standards Act--minimum wage and overtime protections--to nearly 2 million direct care providers. Perez suggests the rule, which applies to home care aides, personnel care attendants, and certified nursing assistants, will provide a fair wage to workers as well as stability and higher quality care to the industry. However, the opposite will take place when the rule goes in to effect on January 1, 2015. According to the DOL's original estimates, the rule will cost $420 million to $2.3 billion over the first 10 years. This will put a strain on Medicare and Medicaid, which cover the majority of direct care service costs. As the National Association for Home Care and Hospice reports, "Medicare payments represent over 40 percent of the industry’s total revenues." Medicaid represents another 24 percent of all direct care service payments. One projected result is less elderly and disabled individuals being able to afford direct care services. Even the DOL's analysis admits "people with disabilities will be institutionalized as a result of these rules." States, which bear a substantial amount of the cost of home care aid, also raised concerns over the impact of the rules on their coffers: "Gov. Jerry Brown's administration estimates that the overtime will cost the state an extra $150 million annually for its In-Home Supportive Services program." In addition, many in the disabled and business community, along with direct care providers, object to the Department of Labor's regulation. According to The Center for Disability Rights, "These rules will ultimately result in caps on hours attendants can work, reducing their earnings while cutting the available workforce." The American Disabled for Attendant Programs Today opposes the regulation on grounds that the Obama administration did not involve the disabled community in the formulation of the new rule. By refusing to involve the disabled community in the rulemaking process, ADAPT finds the rule will:
  • Force seniors and people with disabilities into institutions;
  • Cut the take-home pay of attendants;
  • Reduce the attendant workforce;
  • Force people with disabilities to hire strangers as attendants; and
  • Devastate consumer directed programs.
Marc Freedman, executive director of labor policy for the U.S. Chamber of Commerce, said, “The result will be that these services, that are being relied upon by more and more of our older and disabled parents, relatives, and friends, will be too expensive and beyond their reach.”