Home care aides have been exempt from federal wage laws since 1974, when they were when they were placed in the same category as neighborhood baby sitters. But their ranks have surged with the aging population and the field is now one of the fastest-growing professions. Labor Secretary Thomas Perez said the workers deserve the same legal protections as most other employees.
"Home care workers are no longer treated like teenage babysitters performing casual employment under this final rule," Perez said. "They are treated with dignity and their hard work is indeed rewarded."
Labor unions and worker advocacy groups have been seeking the change for years, arguing that nearly half of caregivers live at or below the poverty level or receive public benefits such as food stamps and Medicaid.
But some health care companies claim new overtime requirements will make it tougher for families to afford home care for their aging parents. Lobbyists for the $84 billion industry argue the new requirements could reduce the quality of care and even lower the take-home pay of caregivers if companies decide not to send workers out for shifts longer than eight hours.
The new rules will take effect in January 2015, a move Perez said will give time for states and industry providers to adjust to the new requirements. New wage and hour rules typically take effect within 60 days after final approval. The rules cover home health aides, personal care aides and certified nursing assistants that provide care to the elderly and people with injuries, illnesses and disabilities.
President Barack Obama first proposed the rules nearly two years ago as part of broader effort to boost the economy and help low-income workers struggling to make ends meet. More than 90 percent of home care aides are women. About 30 percent are black, and 12 percent are Hispanic.
Jodi Sturgeon, president of PHI PolicyWorks, a nonprofit group that seeks to improve conditions for home care workers, called the new rules a "tremendous victory" for home care aides earning near-poverty wages. She estimated that by 2020, the country would need about 4 million home care aides to meet the needs of its graying population. The number of Americans over 65 is expected to nearly double over the next 20 years.
Fifteen states already extend state minimum wage and overtime protections to home care workers, and another six states and Washington, D.C., mandate state minimum wage protections.
The current median pay for home care workers is about $9.70 per hour, higher than the federal minimum wage of $7.25 an hour, according to Labor Department figures. But overtime pay could help lift wages substantially for those who work more than 40 hours a week.
Republican lawmakers said the rules would raise costs and limit access to in-home care for those who need it.
"Faced with higher costs, some individuals will have no choice but to leave their homes and enter institutional living," said a joint statement from Rep. John Kline, R-Minn., and Tim Walberg, R-Mich., who serve on the House Education and the Workforce Committee.
Labor officials estimate the rule would increase Medicare and Medicaid costs by less than three tenths of 1 percent of what federal and state governments spend on the programs.
Nancy LeaMond, executive vice president of the American Association of Retired Persons, said the new rules would help give older Americans who want to live independently the care they need.
"We believe that improving minimum wage and overtime protections for most home care workers will help recruit and retain a sufficient home care workforce for the future," LeaMond said.
The new rules will continue to exempt from minimum wage and overtime requirements those workers who mainly visit the elderly to provide company or engage in hobbies and are employed directly by the person or family receiving services.