Home health care providers in Tennessee are sorting out the potential effects of a new federal rule that will mandate that home care workers receive at least minimum wage and get overtime pay protection.
For nearly 40 years, direct-care workers, who provide home care for people with disabilities or elderly patients, have been exempt from the Fair Labor Standards Act, which outlines standards for minimum wage and overtime pay. Until now, these workers were placed in the same category as babysitters.
Tennessee is not one of the states that currently provides minimum wage and overtime protections to its home care workers, so the new federal rule from the U.S. Department of Labor means that Tennessee home care workers will be entitled to these wage protections for the first time, federal officials said. The new rules will go into effect in January 2015.
Most direct-care workers already receive minimum wage, according to the National Federation of Independent Businesses, a Washington D.C.-based advocacy association. The group claims, however, that the overtime pay requirement will make companionship care unaffordable for some of the population.
"By ending the companionship exemption, DOL has effectively mandated home care providers work in shorter shifts with reduced hours," said Susan Eckerly, NFIB's senior vice president of federal public policy, in a statement.
The theory is that under this new rule, businesses trying to cut costs will keep workers from overtime hours even if clients need more than 40 hours worth of care per week.
"At the same time, those who rely on these services can expect less personal care coupled with significantly rising prices," Eckerly said.
'A breath of fresh air'
Local providers are working to figure out the impact.
"I am still studying it right now," said Ron Benkert, owner of Nashville and Franklin franchises of national home health care franchise company BrightStar.
All of his staff already receives at least minimum wage pay, Benkert said. But about one-third of the care provided by workers at his franchises falls into the category of round-the-clock companionship care that now would require overtime pay.
"It'll make things more challenging," he said. "Exactly how we deal with those challenges remains to be seen. Obviously, we're not going to compromise care over this."
Larger health-care companies with home health divisions likely won't feel much of a hit. For Franklin-based Community Health Systems, for example, "the home health portion of the business is very small in relation to overall operations, representing only about one-tenth of one percent of our overall revenue," said CHS spokeswoman Tomi Galin. "Any impact from the new law — if there is any impact at all — will be insignificant for our organization."
The change is a victory for home care worker advocates, such as New York-based nonprofit Paraprofessional Healthcare Institute. On a conference call last week, the PHI brought together advocates and professionals in the field.
"This decision is like a breath of fresh air," said Lauralyn Clark, a home care worker from Virginia, on the call. "I'm so excited about what is about to happen to me and many other health care workers around the country. Overtime protection is going to make paying for my daughter's college a little easier, and a vacation is now a dream that could come true."