Why Home Care Workers Aren’t Guaranteed Minimum Wage

February 17, 2012 | 1:49 PM

By Amanda Loder

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Recently, the Obama Administration announced plans to change Labor Department rules so that home care workers–personal care aides and home health aides–are guaranteed federal minimum wage and overtime pay.  Right now, states are allowed to decide if they want to include this class of worker under their own minimum wage and overtime laws.  Many have opted not to.  Since the rules change announcement, we’ve mapped which states offer these protections to home care workers, and which don’t.  Most recently, we broke down a study looking at the economic benefits and drawbacks of requiring higher pay for many of these workers.

This issue has led to a key question among some of our readers: Why aren’t home care workers guaranteed minimum wage and overtime when their colleagues in hospitals and nursing homes are?

The answer goes back a long way, but there are two key dates to remember: 1938 and 1974.  In 1938, President Franklin Roosevelt signed the Fair Labor Standards Act (FLSA) into law.  The FLSA was sweeping legislation that, among other things, established the federal minimum wage, overtime laws, and abolished child labor.

Now fast-forward to 1974.  Congress amended the FLSA to cover “domestic service workers.”  So now, almost anyone working in a home–like a housekeeper, butler, or cook–would be guaranteed minimum wage and overtime, too.  But Congress also included an exemption for workers providing “companionship services” to people too young, old, or sick to take care of themselves.  The idea was, parents shouldn’t have to pay babysitters or occasional caregivers minimum wage and overtime.  And as the Carsey Institute’s Kristin Smith explains in her report “Lack of Protections for Home Care Workers: Overtime Pay and Minimum Wage,” it mostly seemed to work just fine, until more women joined the workforce:

“The large scale movement of women into the paid labor market has brought sweeping change to the structure of family life and who cares for family members.  One consequence of this phenomenon was the development of a category of paid workers–the home care worker–to provide care that had previously been performed by women in the home.  Today, our society depends, in part, on the caring labor of many paid professionals to supplement the paid family care of the elderly and disabled adults.”

In other words, in 1974, a lot of housewives used to take care of their old or sick relatives for free.  But as their daughters increasingly joined the workforce, it left a giant gap in care–which home care agencies were happy to fill.  Now there are about 1.7 million home care workers, and many of them aren’t making minimum wage or getting overtime pay.  So the Obama Administration wants to change the Labor Department’s rules to cover these workers.  And if the change goes through, it will cost $4.7 million a year over the next decade, according to statistics Smith cited from the Department of Labor.