Skip to main content
Subscribe
  • Login
  • My Account
  • Logout
  • Register For Free
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Blogs
    • AI
    • Deals
    • Layoff Tracker
    • HLTH 2024
    • Sponsored Content: Vital Signs Blog
  • Opinion
    • Letters
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • 40 Under 40
    • Best Places to Work in Healthcare
    • Healthcare Marketing Impact Awards
    • Innovators Awards
    • Diversity Leaders
    • Leading Women
    • Best in Business Awards
    • The 2030 Playbook Conference
    • Innovations in Patient Experience
    • Leading Women Conference & Awards Luncheon
    • Leadership Summit
    • Workforce Summit
    • Best Places to Work Awards Gala
    • Diversity Leaders Gala
    • - Looking Ahead to 2025
    • - Financial Growth
    • - Hospital of the Future
    • - Value Based Care
    • - Looking Ahead to 2026
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Sponsored Video Series - One on One
    • Sponsored Video Series - Checking In with Dan Peres
  • Data & Insights
    • Data & Insights Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Skilled Nursing Facilities
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
    • Sponsored Content
MENU
Breadcrumb
  1. Home
  2. Providers
September 17, 2013 12:00 AM

Home-care workers to get minimum wage, overtime pay

Ashok Selvam
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    physical therapy - older patient and nurse

    The Obama administration on Tuesday dramatically increased the number of home-care workers eligible to receive overtime and federal minimum wage pay.

    In a long-awaited final rule effective Jan. 1, 2015, the Labor Department narrowed the definition of the companionship exemption, which falls under the Fair Labor Standards Act. Unions including the Service Employees International Union and the American Federation of State, County and Municipal Employees lobbied hard for the change for the 2 million home-care workers in the U.S.

    “For too long this vital occupation, upon which the health and independence of millions depend has been treated as marginal and casual work to be performed under poverty conditions,” SEIU President Mary Kay Henry said in a prepared statement. “This has been so, even as the occupation has become among the fastest growing and most vitally important within the American healthcare system.”

    Advocates of the change overcame intense opposition from the home-care industry.

    “It will mean that people will receive less care,” said Andrea Devoti, chairwoman of the National Association for Home Care & Hospice, in a prepared statement. “Home-care companies will have little choice but to employ workers part time rather than full time as Medicaid payment rates and consumers with limited incomes cannot afford higher costs. Caregivers will in the end receive less pay.”

    The new rule clarifies a policy for companion services that dates back to 1938. Under that policy, workers who care for the elderly at home are exempt from overtime pay and the minimum wage, currently $7.25 per hour. It was the government's way of protecting the elderly and disabled from being on the hook for hourly wages a worker, often a family member, would rack up while living under the same roof.

    But advocates argued that the home-care industry has transformed into a $50 billion a year business, and that those paying the bills could afford paying workers more.

    In response, the Obama administration has redefined the companionship exemption to exclude services typically performed by a nurse or medically trained worker, “regardless of the actual training or occupational title of the individual providing the services.”

    Other updates jettisoned anachronistic language. Terms like “governesses,” “footmen” and “grooms” were replaced by more modern titles such as “nannies,” “home health aides” and “personal-care aides.”

    The rule drew more than 26,000 public comments. The government included a variety of scenarios and projections as to the cost of implementing the policy for home-care agencies. The Labor Department estimates that the overall impact on the industry will be $210 million in the first year, increasing to $468 million in 2024 as the demand for home care workers grows.

    “Direct-care workers play a critical role in ensuring access to high-quality home care that many people need in order to remain healthy and independent in their communities, and they should be compensated fairly for this important work,” HHS Secretary Kathleen Sebelius said in a news release. “We will continue to engage with consumers, states, advocates and home-care providers in the implementation of this rule to help people with disabilities, older adults and their families receive quality, person-centered services.”

    Home-care workers offer an alternative to a nursing home for the elderly and disabled, allowing clients to remain living in their own homes. Organizations representing the home-care workforce said the companionship exemption allowed employers to exploit the workforce.

    “There's a lot we need to do as a nation to improve the quality of these jobs,” said Steve Edelstein, national policy director for the Paraprofessional Healthcare Institute, a New York-based advocacy group. “It's not too far down the line that we're seeing that as the baby boomers age, that we're going to need more than 1 million additional workers just to keep up the demand over the next decade.”

    Fifteen states already offer minimum wage and overtime protections to home-care workers. Edelstein said many home-care agencies already operate in those states and would be able to weather the financial impact.

    (Story updated at 10:20 a.m. Central time to include Labor Department estimate of the rule's impact on the industry.)

    Follow Ashok Selvam on Twitter: @MH_aselvam

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    mh-20250508-post-acute-care
    Post-acute providers see hiring boost as possible recession looms
    Cleveland-clinic-for web_i.jpg
    Cleveland Clinic, Regent Surgical form ASC joint venture
    Most Popular
    1
    Best Places to Work in Healthcare - 2025 (alphabetical list)
    2
    House GOP bill would make deep cuts to Medicaid
    3
    AI health risk assessments aim to boost Medicare Advantage pay
    4
    How health system CFOs are navigating the growing uncertainty
    5
    CMS proposes crackdown on 'money laundering' provider tax policies
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Help Center
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2025. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HLTH 2024
      • Sponsored Content: Vital Signs Blog
    • Opinion
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • 40 Under 40
        • Best Places to Work in Healthcare
        • Healthcare Marketing Impact Awards
        • Innovators Awards
        • Diversity Leaders
        • Leading Women
        • Best in Business Awards
      • Conferences
        • The 2030 Playbook Conference
        • Innovations in Patient Experience
        • Leading Women Conference & Awards Luncheon
        • Leadership Summit
        • Workforce Summit
      • Galas
        • Best Places to Work Awards Gala
        • Diversity Leaders Gala
      • Virtual Briefings
        • - Looking Ahead to 2025
        • - Financial Growth
        • - Hospital of the Future
        • - Value Based Care
        • - Looking Ahead to 2026
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Skilled Nursing Facilities
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing
      • Sponsored Content