Posts Tagged ‘companionship services exemption’

Judge Places Temporary Restraining Order on New Companionship/Overtime Rule, Delaying Implementatio

December 31, 2014


Please note the really good news below. Help pass this on to other homecare providers who are members and most importantly pass it on to those providers who are not members of HCAF. This in an excellent example of what Trade Associations (National and State) can accomplish when they work together and are supported by a connected, engaged industry. With your continuing support we will gain even more ground and additional wins in 2015! Thank you all and I hope each of you have a wonderful and safe New Year’s celebration.

December 31, 2014


U.S. District Court Issues Order Blocking a New Department of Labor (DOL) Rule Which Would Redefine Companionship Services

Andrea Devoti, Chairman of the National Association for Homecare and Hospice (NAHC) today hailed the decision of the U.S. District Court for the District of Columbia which issued a Temporary Restraining Order (TRO) blocking DOL from enforcing a proposed new definition of “Companionship Services.”

“This means that our most vulnerable citizens get at least a temporary reprieve from what would otherwise have become a significant cost barrier to their paying for help at home for their chronic diseases.  Without this relief many seniors would be pushed into institutional care,” said Ms. Devoti.

This decision follows on the heels of a December 22 ruling by this same Court which restored the rights of home care consumers to benefit from the “companionship services” and “live-in” exemptions regardless of whether their caregivers were employed by persons receiving the care or by a home care company.

The lawsuit challenges a rule that would have significantly changed a longstanding 40 year old Federal overtime rule known as the ‘companionship exemption’ under the Fair Labor Standards Act.  The new rule would have defined ‘companionship services’ to be primarily “fellowship” and “protection”.  Under the new DOL rule, the exemption would not have applied if home care workers serving patients gave more than incidental personal care services. The proposed rule would have required all current caregivers to be paid overtime compensation in almost all cases.  This change would have led to higher costs which would have to be borne by infirm individuals or by the states and federal government through financially strapped programs such as Medicaid.

Following the court’s ruling on December 22, NAHC asked the court to stay the effective date of a new narrow definition of “companionship services”, which seemed to have the intent to eliminate two exemptions to overtime rules which benefit patients and home care employers.

In its motion for a temporary stay, NAHC argued that home care recipients, companies, employees, and payers of services would face a risk of irreparable harm if the DOL rule went into effect. NAHC also explained that it would be likely that its claims would succeed on the merits and that the public interest would be best served by maintaining the status quo on overtime exemptions while the lawsuit proceeds.

The effort for temporary relief was supported with detailed affidavits of likely harm submitted by two disability rights advocacy groups, The Centers for Independent Living and ADAPT along with the Kansas state Department on Aging which is concerned about the financial stability of its home care programs if overtime compensation is required.

The next phase of the case will occur quickly, as the court has scheduled a briefing and a hearing on whether a Preliminary Injunction should be issued. A TRO can be in force for no more than 14 days while a Preliminary Injunction can be in effect until a final ruling on the case.

The hearing is set for January 9. The judge indicated that he may rule on the preliminary injunction at the hearing, but he would rule no later than January 13.

During the time in which the TRO is in effect, home care companies can continue to pay home care aides and personal care attendants without added overtime compensation (as per usual in Florida). Home care companies are advised to consult competent counsel to determine if they qualify to use the exemption. If the requested injunction is granted on January 9, the exemption from overtime will continue until the court’s final ruling or the Court of Appeals reverses the injunction. The Department of Labor has previously indicated that it would appeal any adverse ruling of the court.

“Obviously some well intentioned people in the DOL put forth a rule which they said would be good for patients, helpful to homecare employees, and the companies that hire them, and equally good for State/Federal programs such as Medicaid. The fact is that the proposed regulation would have had exactly the opposite effect on every category.   For this reason NAHC applauds the US District Court for its rulings  and will continue to lead the effort  in support of the companionship rules as they have been in effect for more than 40 years,  and which have been sustained by a unanimous vote in the U.S. Supreme Court,”  said Chairman Devoti.

US House Subcommittee Has Hearing on Effects of Labor Dept.’s Final Rule on the Companionship Services Exemption

November 22, 2013

On Wednesday, the House Subcommittee on Workforce Protections held a hearing analyzing the potential implications of the final rule released by the US Department of Labor (DOL) making changes to the companionship services exemption. The most significant change comes in the form of home care employees who provide companionship services will be required to be paid overtime wages for any work completed over 40 hours per week.

Subcommittee Chair Tim Walberg (R-MI) stated that he had asked the DOL for the justification for the final rule, but had not received a response. Chair Walberg claimed the rule created “rigid and arbitrary” requirements for home care agencies and hurts all players in the industry more than it helps.

Lucy Andrews, Vice-Chair of the National Association for Home Care and Hospice, explained how the new rule would be detrimental to employees, patients, and providers of home care.

When presented with the idea that the new rule is suggested to reduce the amount of turnover for these employees, Ms. Andrews testified that the rule would have the opposite effect, with employees receiving less hours under the new rule and seeking employment at multiple agencies.

Despite the multitude of concerns expressed by several witnesses, most feel the Department of Labor is unlikely to rescind the rule.

HCAF will continue to take measures to fight against the DOL’s final rule on the companionship services exemption in order to protect patients, employees, and operators in our industry.

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Companionship Services Exemption: HCAF and NAHC’s Continued Advocacy Efforts

October 18, 2013

On September 16, 2013, the U.S. Department of Labor issued the Final Rule that significantly modified the longstanding “companionship services” and “live-in domestic services” exemptions from minimum wage and overtime compensation. The rule changes take effect on January 1, 2015.

NAHC has developed a series of strategies to address the impact of the rule in home care. These strategies include a series of defensive measures through Congress, litigation to invalidate the changes, and a strategy to make the rule change livable for home care providers. HCAF is helping every step of the way by reaching out to Florida Congressmen and letting them know how dangerous this rule will be for patients and providers in their home state.

The defensive legislative strategies include the introduction of legislation to reverse the rule change. However, this strategy has a very limited chance of success given the veto power of a President who fully supports this rule. Similar measures such as an attempt to defund the rule implementation are likely to face comparable results.

NAHC continues to evaluate and assess a litigation strategy. NAHC has successfully defended the current rule before the U.S. Supreme Court twice, most recently in 2007. However, litigation this time around would aim to invalidate the rule, which is a much more difficult effort. Also, if litigation is pursued, it would require success on both the revised definition of “Companionship Services” as well as the change that excluded third-party employers from the exemption.

The latest NAHC strategy is being termed the “lemonade approach.”  The rule– a “lemon”– would be turned into “lemonade” by securing federal support for the new costs that the overtime rule would create. With the new funding, home care companies can continue to meet consumers’ needs without resorting to part-time workers, reducing base wages, or other similar measures to control cost growth. Consumers would win by getting experienced staff with reduced staff turnover. Workers would benefit by getting improved wages. Companies would remain stable as the new costs are funded.

The “lemonade” strategy would begin with the concept that the President must find a way to fund the new mandate if he wishes to achieve his intended goals for workers without harming consumers and home care businesses. Funding the new mandate may entail two separate actions. For federal health care and personal care programs, regulatory changes in the benefit programs could include a requirement to adjust payment rates to cover any new costs incurred complying with the overtime rule.

Private pay home care can be addressed in a different way.  Since rates are set by the private businesses in contrast to government funding programs, consumers can be protected from the higher care costs triggered by the new rule through a tax credit program. Current tax law includes several tax credit programs under which individuals receive a tax payment credit when expenses are incurred for a particular good or service. With this approach, the elderly and disabled can qualify for a credit if they purchase home care services. The credit would be payable even where the consumer has no income tax liability.

The “lemonade” strategy would not be an easy or success-guaranteed advocacy effort. It will take hard work and luck to succeed. However, it is the one strategy that will bring the most stakeholders together as consumers, workers, and employers should all be able to support it.

HCAF will continue to work with NAHC to secure the most positive outcome for home health providers. Stay tuned as more information develops on this very important issue.

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The Companionship Exemption Explained

October 4, 2013

The following article comes from an upcoming CARING Magazine piece written by CARING’s Managing Editor Lisa Yarkony. CARING is published by the National Association for Home Care and Hospice.

A new rule from the Labor Department decrees overtime pay for home care workers, a move that may ruin Jonathan’s life. Jonathan is disabled and depends on a ventilator to breathe. He has three regular caregivers who cover most of his shifts, and two of them work the majority of hours. He has had these trusted caregivers for over 20 years, but he may soon be seeing some strange, new faces in his home. Because they aren’t family and don’t live with him, their hours will be capped at 40 under the rule. This means that Jonathan will need to hire additional caregivers and the earnings for his current caregivers will be cut. Jonathan is worried that he won’t be able to find caregivers who are as skilled when their weekly pay check is less than half of what he’s been paying his current ones. If Jonathan can’t make it work, he knows he will wind up in a nursing home … or worse.

And he isn’t the only one who fears the new rule despite cheers that the “White House is giving 2 million health care workers a raise,” as the Washington Post gleefully declared. The Cato Institute was more inclined to jeer at the rule requiring time-and-a-half overtime pay for home care workers who put in more than 40 hours a week serving the disabled and aged. “This is a terrible move,” the institute sneered in no uncertain terms. “The fear and anger it has stirred is coming not just from commercial employment agencies, as some careless media accounts might leave you to believe, but above all from elderly and disabled persons and their families and loved ones who know that home attendant services are often the only alternative to institutional and nursing home care.”

But they will have less access to this valued option under the new rule, according to Andrea Devoti, chairman of the board of directors at the National Association for Home Care & Hospice (NAHC). Devoti said the changes would force home care companies to employ more workers part time because Medicaid payment rates and consumers cannot bear higher costs. “Caregivers who were hired full time will be shifted to part time,” she explained. “What it means for aides and caregivers is less work and reduced compensation. Under these circumstances, there is no way to view the rule as a boon to either patients, their families, or to federal and state governments. It certainly will not encourage more people to take on the difficult job of personal care assistant or home health aide. In the end, it will cost individuals, home health agencies, and governments billions more. Yet the end result will be less care, not more,” a consequence that the Labor Department blithely ignored when it changed a rule that dates back 39 years.

Home care aides have been exempt from federal wage laws since 1974 when they were placed in the same “companionship services” category as baby sitters. But that will change when the rule goes into in effect in 2015, a date meant to give states and agencies time to adjust to all the changes in store. The biggest change is that third-party employers, such as home care agencies, will no longer be able to claim the exemption for workers who provide companionship services. Another change will be to narrow the scope of the term “companionship services” and limit the care-related services aides can perform each week. According to the Labor Department, activities like meal preparation, bathing, and driving should be secondary to the “fellowship and protection” that companions also provide. If aides spend more than 20 percent of total hours performing care services in a given workweek, agencies will be required to give them overtime pay. Consumers alone can claim the exemption, but they, too, will have to pay overtime to workers who devote more than 20 percent of their time to giving care — instead of crucial activities like playing cards.

The stated intent of these changes is to give home care workers the same legal protections as most other employees. “Health care workers are no longer treated like teenage babysitters performing casual employment under this final rule,” said Labor Secretary Thomas Perez. “They are treated with dignity and their hard work is indeed rewarded,” — as it should be. No one disputes that home care workers are essential to this nation’s future. We should do everything possible to show home health aides and personal care assistants that they are respected and valued.

Yet the new rule will have the opposite effect, Devoti points out based on the facts. “The experiences in states that previously eliminated the companionship exemption indicate that workers get fewer hours and less total pay,” she explained. “The reason for this is that most home care is paid for under government programs, such as Medicaid, that set payment rates. Home care agencies have no way to cover the increase in costs for overtime compensation, so they can only limit their caregivers’ hours,” a prospect that our nation’s largest state has already discussed. “Earlier this year California Governor Jerry Brown suggested that the state may need to prohibit any caregivers funded under its Medi-Cal program from working over eight hours in a day and over 40 hours per week to avoid the added cost of overtime pay.”

Do these valued workers deserve to be paid fairly for their work? In theory, yes, Devoti would heartily agree. “But the central problem with this rule change,” she says, “is that it is occurring in isolation from other changes that are needed to make it work. There is no concurrent change in Medicaid rules that would require a revision in payment rates to cover this cost. Also, there is no support offered to the many aged and disabled persons who are on limited incomes yet pay out of pocket for the home care services that will let them stay out of nursing homes and other institutions. We support fair compensation to the hardworking caregivers who assist the most vulnerable people in our country. But that added pay does not just come out of thin air,” Devoti said, expressing NAHC’s long-term stand against changes to the rule.

Since the 1990s, NAHC has fought numerous attempts to narrow the scope of the companionship services exemption, mainly by limiting the exemption to cover only those home care workers employed directly by consumers. NAHC formed a coalition of stakeholders made up of the Private Care Association, representing caregiver registries; the Home Care Association of America, representing private duty home care; the International Franchise Association; and the National Federation of Independent Business. NAHC has met with the secretary of the Labor Department and garnered bipartisan support for its position from both the U.S. Senate and House. It has testified at Congressional hearings on bills to change the rule and on two occasions, it has gone before the Supreme Court, where it played a role in the justices’ decision to uphold the rule. Last year, NAHC and its affiliate Private Duty Home Care Association of America also conducted a national survey of 1,500 home care agencies on the impact of the rule.

The survey results showed that ending the overtime exemption for home care workers will have serious negative consequences for workers, clients/patients, and home care companies. The major impact on workers is the cut in hours triggered by the home care companies’ efforts to control costs. Nearly 63 percent of the respondents who had to pay overtime under state law said they restricted overtime hours. More than 86 percent of the companies that will face a new overtime requirement under the rule said they would restrict the hours worked by staff to prevent overtime costs. And workers won’t be the only ones to lose out. The survey showed that 81.8 percent of companies expect to increase their private pay billing charges and 23.7 percent expected to scale back the availability of care. The result will be less continuity of care brought on by the need to assign multiple caregivers to control overtime costs. In response, some respondents remarked, clients would hire workers “under the table,” where they would lose the quality control and oversight that agency workers provide.

Patients would suffer, agreed the national associations for the state Medicaid, Aging and Disability, and Developmental Disability directors who pointed to the adverse impact the new rule would have on people who received Medicaid home and community-based care. “We are deeply disappointed,” they stated, “that the Administration ultimately failed to adopt a rule that balances fair compensation for home care workers with the equally critical goal of assuring the ability of older adults and people with disabilities to maintain their independence at home and in their communities. Implementation of this rule will require additional funding and may result in the cost of supporting people in their homes becoming prohibitive.”

If that happens, federal programs like Medicaid will end up paying a great deal more with no improvement in access to care or in its quality, Devoti said. “Like the disability community, we believe it is better policy to affirm the decision of the U.S. Supreme Court which unanimously sustained the validity of the companionship exemption as it had been applied for over 35 years. We believe there is much that Congress can do to put this matter right — which means helping people to receive the quality care they need and at the same time giving caregivers a fair and honorable wage. The federal wage and hour laws were written when most health care was received in institutional settings. Today more and more care is delivered in the home setting. These laws need to be reevaluated by Congress in total rather than piecemeal fashion. The central focus should always be what is best for the people needing care.”

Given all that’s at stake, NAHC, along with its affiliates the Private Duty Homecare Association and the National Council on Medicaid Home Care, is exploring further advocacy efforts on the rule change, including federal court litigation and congressional legislation. They already have support from two members of the House Education and Workforce Committee who pointed to estimates showing the new rule could lead to a $2 billion increase in health care costs over the next decade. “Faced with higher costs, some individuals will have no choice but to leave their homes and enter institutional care,” said Committee Chairman John Kline (R-MN) and Rep. Tim Walberg (R-MI), who chairs the panel’s subcommittee on Workforce Protections.

Rep. Jim Langevin (D-RI) also came out against the rule in a recent interview with NAHC President Val J. Halamandaris. Langevin is a quadriplegic who has received home care for most of his life. He’s also an expert on issues involved in the rule change, and he worries about the consequences it will produce. “I’m concerned,” he said, “both for the people receiving the care and for the people who are giving the care. I believe and I value greatly the services of the people who have assisted me over the years. But I understand that without greater reimbursement reform and more resources, it will be very difficult to see a change in the rule.” And the results could be grim, he warned, if the rule does go into effect. “I think you would potentially see less care for the persons who need it and hours cut back for the caregivers who provide it. Neither patients nor caregivers would benefit from the rule change; it might actually put them both at a disadvantage,” Langevin said. And many aged and disabled share his concerns. They know this ruinous rule could rob them of the chance to have independent lives at home.


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U.S. Department of Labor to End Companionship Exemption – Extend Minimum Wage and Overtime Pay Mandate to Direct Care Workers

September 17, 2013

The home care industry took yet another hit today. The United States Department of Labor has just announced that effective January 1st, 2015, agencies and other employers of direct care workers who provide home care services (such as certified nursing assistants, home health aides, personal care aides, caregivers, and companions) will will no longer be able to claim the Companion Exemption for live-in domestic service workers. Agencies and third-party employers will be required to pay these staff members the federal minimum wage and overtime pay.

This means live-in workers must be paid no less than the state or federal minimum wage (whichever is higher) and be paid an overtime rate not less than 1.5 times their regular rate of pay for hours worked past 40 hours in one workweek.

The Department of Labor will be holding a free webinar on what to expect with these changes. The webinar will take place Tuesday, October 15th, 2013 from 10:00-11:00AM EST. Registration has not yet opened for the webinar.

HCAF regrets this decision and continues to argue that this ill-guided policy hurts everyone involved; the provider, the direct care worker, and the patient. We are here to answer any questions you may have about this change and how it will affect agencies and employees in the future.

For more information, please see the Department of Labor’s website detailing the changes for home care.

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Home Care Workers Still Waiting For Labor Protections After Promise From Obama

June 26, 2013

By Dave Jamieson, The Huffington Post

WASHINGTON – In December of 2011, President Barack Obama stood at the White House alongside a group of home care workers and announced that his administration would extend minimum wage and overtime protections to them after decades of exclusion. The White House still has a video on its YouTube channel explaining the significance of the regulatory change, entitled “A Promise Kept.”

But in reality, the president hasn’t yet delivered on that promise. A year and a half after the fanfare, home care workers who tend to the elderly and disabled in their homes are still not covered under the Fair Labor Standards Act, the Depression-era statute that serves as a bedrock of U.S. labor law. The president’s proposal remains under review at the White House, where industry players have lobbied to have it softened, if not scrapped. (more…)

Companionship Services Exemption: A Deadline Missed

June 19, 2013

By Jane Gross, Special to The New York Times

Legions of home health aides continue to toil for less than minimum wage, the only American workers not covered by the Fair Labor Standards Act. More than a month has passed since May 14, when President Obama could have ended this exclusion and, with the stroke of a pen, forced a new regulation into effect. All legal deadlines and extensions in this sclerotic regulatory process have been exhausted. (more…)

Home Care Workers Demand Minimum Wage, Overtime Protections

June 12, 2013

By Elise Viebeck, The Hill

Home care workers are demanding final rules from the Obama administration that would give them federal minimum wage and overtime protections.

The Paraprofessional Healthcare Institute (PHI), which represents home health aides, certified nurse aides and personal care attendants, called on President Obama to extend the protections of the Fair Labor Standards Act to its members.

The group pointed to Obama’s promise in December 2011 to ensure home health jobs offer the same wage-and-hour standards as other healthcare posts. (more…)

Obama Administration Mulls Rule To Give Home Health Aides Better Wages

April 29, 2013

By Alvin Tran, Kaiser Health News

As a home health aide, Nicole Fletcher, 40, provides personal assistance to the elderly, disabled and those living with chronic conditions in their own homes. She assists them with activities of daily living – including bathing, dressing and eating – and, on occasion, she often stays to help them overnight.

“Sometimes there will be 24-hour cases because the client needs care and cannot be left alone depending on their condition,” she said.

Working for a District of Columbia-based company, she earns more than the minimum wage and is paid time-and-a-half for every hour she works beyond her usual 40 per week. But unlike Fletcher, close to 2 million in-home care workers and personal care aides in the United States don’t always get paid for overtime work or receive minimum wage, according to the U.S. Department of Labor. They are explicitly excluded from a key federal wage law that carved out exceptions for causal babysitters and companions for people who are sick or disabled. (more…)

Vladeck Urges Obama Administration To Act On Home Health Worker Overtime Rule

April 24, 2013

The former head of Medicare and Medicaid in the Clinton administration last week called on the Obama administration to act soon on a proposed rule to extend overtime and minimum wage pay to in-home health care workers. Bruce C. Vladeck said opposition to the proposal comes mainly from home care staffing agencies that have managed to “frighten” state Medicaid directors into an alliance.