President Obama and Labor Secretary Hilda Solis said the proposed new rule, announced Thursday, would provide minimum wage and overtime protections for nearly 2 million workers who provide in-home care services, the White House said in a release.
Currently, workers classified as "companions" are exempt from the Fair Labor Standards Act's minimum wage and overtime requirements. The proposed regulation will reconsider whether the exemption is too broad.
When established in 1974, the exemption was meant for casual sitters and companions for the elderly and the sick, not in-home healthcare service providers, Obama said when discussing the proposed rule change."
"As the home care business has changed over the years, the law hasn't changed to keep up," Obama said, and lumped professional home health providers "in the same category as teenage babysitters when it comes to how much they make. That means employers are allowed to pay these workers less than minimum wage with no overtime."
"That's just wrong. In this country, it's inexcusable," Obama said.
Companies that do pay home-health workers minimum wage also don't deserve to be penalized, he said.
"We are going to make sure that over a million men and women in one of the fastest-growing professions in the country don't slip through the cracks. We're going to make sure that companies who do right by their workers aren't undercut by companies who don't," Obama said. "We're going to do what's fair, and we're going to do what's right."
Labor Secretary Hilda Solis said the proposed regulation would ensure that home healthcare workers' work is properly classified "so they receive appropriate compensation and that employers who have been treating these workers fairly are no longer at a competitive disadvantage. "
The proposed rule and a fact sheet are available at www.dol.gov/whd/flsa/companionNPRM.htm.
The proposal will be subject to 60 days of public comment.
Several Republican lawmakers have criticized the anticipated proposals, saying they raise costs for individuals, and federal and state programs, The New York Times reported.
At a hearing last month, Rep. Tim Walberg, R-Mich., chairman a House subcommittee on work force protections, said, Medicare and Medicaid expenses likely would increase because of the proposed change in the companion definition.
The move likely would mean senior citizens and their families would be "less able to afford home care, which is typically paid not by insurance, but by families themselves," he said.