WASHINGTON -- In a move sure to please labor leaders and worker advocates, President Obama came out in support Thursday of a long-awaited change to labor law that would entitle the country's nearly 2 million home care aides to overtime pay and a guaranteed minimum wage, likely raising the pay scale in a booming industry.
Though the rule is still under review, if approved it will remove a 36-year-old exemption for home care aides from the Fair Labor Standards Act, the law that provides basic wage protections for most American workers. While home care aides have been calling for the change for more than a decade, some industry leaders say the new rules will raise their labor costs, forcing them to hike prices on customers.
Knocking Congress for its lack of progress on jobs, the administration described the rule change as part of a series of executive actions designed to help working-class Americans and the economy as a whole.
"They work hard and play by the rules and they should see that work and responsibility rewarded," Obama said of home health aides in a statement. "Today's action will ensure that these men and women get paid fairly for a service that a growing number of older Americans couldn't live without."
Most home health aides are already being paid above the minimum wage, but employers don't have to pay them overtime, thanks to the so-called "companionship exemption," which critics say was intended for casual workers like babysitters. Since the exemption was carved out in 1976, home health care has morphed into a massive industry as a growing number of Americans hit their golden years.
Home health aides tend to care for people who are disabled or chronically ill, performing important duties like tube-feeding or physical therapy. Many of them work long hours and travel to several different patients' homes in a single day. For those who work over 40 hours a week, the new overtime rule could give their paychecks a significant boost.
House Republicans, who've blasted the administration for what they deem burdensome new regulations on job creators, quickly pounced on Obama for putting his weight behind the rule change. In a joint statement, Reps. John Kline (R-Minn.) and Tim Walberg (R-Mich) said the president was moving forward with a new regulation without considering the costs to businesses.
"Once again, the administration is pursuing new regulations without regard for the potential unintended consequences," they said. "The president’s goal is commendable, but the likely result of this new rule is reduced hours for home care workers and higher costs for taxpayers."
Paul Hogan, CEO of Home Instead Senior Care, which has 900 franchise offices nationwide, recently told HuffPost that the new rule "will drive up our costs," and that "our clients and their families do not want to pay for overtime, and they will go to alternatives."
But a home care aide in Florida who regularly works over 70 hours a week without overtime pay told HuffPost she supports the rule change, even if it will lead to higher costs for patients. "If you're in this job for money, you're in it for the wrong reason," the woman said, requesting anonymity. "But I'd like to see that change someday."
In 2007, the Supreme Court ruled against a home care aide named Evelyn Coke, who argued that her long hours entitled her to overtime pay. The court upheld the companionship rule, leaving it to either Congress or the Labor Department to update it. Congress has done little on the issue, but the Labor Department has moved the rule change forward with the backing of Sec. Hilda Solis. Now that it has the administration's blessing, the new rule will undergo a public-comment period before it's finalized.
In a statement, Sen. Tom Harkin (D-Iowa), chairman of the health and labor committee, argued that the rule change would ultimately lead to lower turnover rates and higher morale among workers, benefiting both home aides and the people they care for.
"It will help encourage more workers to enter and remain in this field, so that we can ensure that all of our parents and loved ones with disabilities receive the quality care they deserve," Harkin said.
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