SAN DIEGO, March 8, 2012 – Findings 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 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.
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