New Health-Aid Wage Ruling Creates Lose-Lose Situation

Hour cuts possible for nearly two million home health workers.

The United States Chamber of Commerce says the U.S. Department of Labor created a lose-lose situation with a ruling made on Tuesday, September 17. According to a press release issued on the Department of Labor website, the ruling extends the Fair Labor Standards Act’s minimum wage and overtime requirements to apply to nearly two million workers nationwide who provide essential home care assistance to elderly people and people with illnesses, injuries or disabilities. This includes Assisting Hands Home Care services for 1,500 people, offered in 14 states, allowing individuals to avoid institutionalized care, and remain living independently, safely and comfortably in their own homes.

While aimed at benefitting these workers, the U.S. Chamber’s executive director of labor law, Marc Freedman, told the Wall Street Journal Wednesday, “In the end, the people who’ll be likely to suffer will be the workers who can’t get work they had before.” Freedman ties this concern to decisions he fears especially small businesses will make as a reaction to the increasing cost associated with the ruling. This could include businesses’ decisions to reduce full-time employees in favor of hiring more part-time employees, cut hours and increase costs for care charged to those receiving it.

The International Franchise Association (IFA) represents 1,100 franchises worldwide, which includes members of the home health care industry, including Assisting Hands Home Care. IFA President & CEO Steve Caldeira shared his concerns in a release issued Tuesday about the overall impact upon not only small, franchise businesses, but also the seniors receiving care. “The Obama Administration’s decision to extend minimum wage and overtime protections to home care workers will impose costly, burdensome and unnecessary regulations at a time when an increasing number of seniors are enjoying in-home companion care as a cost-effective alternative to traditional care.”

These changes go into effect on January 1, 2015, and will affect one of the fastest growing U.S. industries which already faces dramatic changes due to changing Medicaid health care reimbursement rates.  The Department of Labor estimates the number of home health care workers will reach 3.2 million by 2020, due to the aging U.S. population. According to the Pew Research Center, 10,000 Baby Boomers will turn 65 today, and about 10,000 more will cross that threshold every day for the next 19 years.

Source:  Assisting Hands Home Care in association with E.H. Anderson PR. © E.H. Anderson PR 2013