Report: Labor law repeal hurts seniors, small businesses, taxpayers

Proposed changes will do harm to the people depending most upon these services, America’s seniors.

SAN DIEGO, March 8, 2012Findings from a newly released report show the U.S. Department of Labor has grossly underestimated the negative impact and overall costs of its proposal to repeal the federal Companionship Exemption, subjecting in-home caregivers to minimum wage and overtime laws.

The report released by the International Franchise Association, Economic Impact of Eliminating the FLSA Exemption for Companionship Services, paints an alarming picture of the future for seniors and disabled adults who need in-home care to live independently, as well as the cost to the thousands of small businesses that provide professional in-home caregivers.

According to home care providers surveyed for the report, nearly one in four seniors currently receiving private duty home care would be forced into institutional care or into the underground employment market due to increased costs and interruptions to their care; much of the cost burden would then fall to the taxpayers. 

Yet the Labor Department stubbornly refuses to acknowledge that there would be any increase in seniors or the disabled being forced into institutionalized care as a result of the increased costs of home care.

The Labor Department has grossly underestimated the negative impact and costs of its proposal to eliminate the Companionship Exemption according to a new study.

The study reports if the proposal to repeal the Companionship Exemption is implemented as planned, the quality of care as provided will suffer and the financial impact will devastate seniors as well as the in-home care industry.

According to the analysis, the Labor Department understated the amount of home care that would be covered under overtime laws, which would be three times greater than estimated. “(The report) suffers from (other) analytical shortcomings, including improperly characterizing the likely effect of repeal on the quality of care; ignoring the likelihood of shifting consumers from home care into institutions and the disproportionate effect of repeal on special needs populations; and, failing to consider regulatory alternatives, such as continuing to allow states to regulate minimum wage and overtime provisions.”

The authors write that the Labor Department’s analysis “is based on a paucity of data and factual information, even about such fundamental issues as the number of employees and consumers potentially affected, and relies instead on speculation and unfounded assumptions which are systematically biased to understate the costs of the proposed rules.”

As a result, the impact to families and home care workers would do significant harm.

Among the report’s key findings:

  • The Labor Department underestimates the added costs of the bureaucracy needed to comply with new paperwork and human resources requirements, managing new personnel due to changes in staffing limitations, hiring and training, and the cost of paying workers to travel between work sites.
  • Most employers would not pay overtime; they would prefer to hire additional part-time workers at lower wages, decreasing the take-home pay for many current hourly employees.
  • About 75 percent of the home care businesses surveyed said they expected to pass along increased costs to their customers, thereby raising the cost of caregiver services for seniors. These costs often are direct to seniors, since Medicare and Medicaid only cover health services, and many caregiver services are not health-related.

The report recommends that the Labor Department consider additional research prior to any final changes in law.

Families who engage private duty non-medical home care services do so in an effort to keep seniors and the disabled in their own homes as long as possible, reducing costs and delaying any move to assisted living or long-term nursing care as long as possible, while maintaining independence and dignity for their loved ones.

If costs increase due to the removal of the Companionship Exemption, small business owners will be forced to pass them along to their caregiver clients who can ill afford to pay them. It may end up exhausting their financial resources, forcing sale of their homes and a move into institutional care, at which time costs of care would fall upon taxpayers through Medicaid.

The alternative is the danger of engaging caregivers through the underground economy, by private ads or referrals. While the cost can be held down, the senior becomes at risk for physical or financial abuse or neglect. They put themselves at risk from being attended by a untrained person providing care.

Worse yet, some seniors and disabled may reduce or go without home care assistance altogether. Family members may find themselves forced to care for aging parents, leaving the workforce and their own families including children to become caregivers.

The bottom line: these changes will harm the people who depend upon these services the most, America’s seniors. The Labor Department will impose costly, burdensome and completely unnecessary new regulations and costs upon an entire industry and its clients.

Older Americans far prefer to stay in their own homes as long as possible, using reliable home care services and respite care for caregivers.

The timing could not be worse. As the Baby Boomer population ages, the American home care industry is on the brink of tremendous growth as more seniors engage home care as a cost-effective, humane and satisfying solution to remaining independent. Surveys consistently show that up to 90 percent of seniors prefer to age in their own homes. That growth will be killed if new regulations force seniors to find alternatives.

The Labor Department has extended the deadline to respond to its proposal for a second time, through Wednesday, March 21. Comments may be submitted online at, or in the mail to Mary Ziegler, Director, Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington D.C. 20210. All submissions must include the agency name and Regulatory Information Number (RIN) 1235-AA05.

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Laurie Edwards-Tate, MS, is President and CEO of At Your Home Familycare in San Diego, California. In addition to her positions as entrepreneur, health care executive, educator, radio segment contributor and media guest, Edwards-Tate is also a wife, daughter, and dog lover. Read more  LifeCycles in the Communities at The Washington Times. Follow At Your Home Familycare on Facebook and on Twitter @AYHFamilycare.


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Copyright © 2012 by At Your Home Familycare



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Laurie Edwards-Tate

Laurie Edwards-Tate, MS, President and Founder of At Your Home Familycare in San Diego, California, was among the first to recognize the growing need for services allowing individuals to remain independent created by the aging of America including the Baby Boomer generation, now being called the “Silver Tsunami.” It is the Baby Boomers who are rapidly redefining what aging and growing older means and looks like in America today.

Now celebrating its 28th year in business, AYHF is among San Diego County’s Top  Women-Owned Businesses and Fastest Growing Businesses, and enjoys a reputation for upholding the highest possible standards among its employees and its emphasis on customer service.  Edwards-Tate is a valued contributor to the public dialogue on current issues and challenges in the home care industry, and serves in leadership roles on the Home Care Aide Association of America Advisory Board and Private Duty Home Care Association Advisory Board, as well as the Home Care Aide Steering Committee of the California Association for Health Services at Home.

Edwards-Tate is frequently interviewed in the media on healthy aging, caregiving, and health care topics. 

 Follow Laurie and AYHF  at; on Facebook at, and Twitter at @AYHFamilycare

Contact Laurie Edwards-Tate


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