Close up image of a caretaker helping older woman walk

The Department of Labor has announced it will extend minimum wage and overtime protections to home health workers providing direct care, earning cheers from long-time advocates of this policy.

For four decades, the Fair Labor Standards Act has classified home health workers as primarily companions to those under their care. This “companionship exemption” meant that home care agencies and similar organizations were not required by law to pay direct workers the federal minimum wage or for overtime. Under the new rule, direct care workers who provide medical services that require training to perform will be entitled to minimum wage and overtime starting in January 2015. Those who are employed by an individual or an individual’s family, and who primarily provide company rather than medical services, will still fall under the FLSA’s companionship exemption.  

Workers’ rights and advocacy organizations, such as the Paraprofessional Healthcare Institute and the National Consumer Voice for Quality Long-Term Care, applauded the rule.

PHI President Jodi M. Sturgeon called the rule “a tremendous victory” for the home care workforce, which numbers an estimated two million and includes home health aides, personal care aides and certified nursing assistants.

The rule will improve worker retention in the home care field and protect people’s access to high-quality long-term services and supports, according to Consumer Voice.

Home care is often presented as an alternative to nursing facility or other residential care options, but the growing importance of care coordination and the emergence of bundled payment systems has meant more facility-based operators are seeking ways to offer in-home care or partner with these providers. The rule could have implications for this trend, as some observers have noted some home health agencies will soon see labor-related costs increase.

Click here to access DOL’s web portal with resources related to the new rule.