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The Obama administration pledged Tuesday to extend U.S. minimum wage protection and overtime law to almost two million home health workers who assist the elderly and disabled, closing a legal loophole that has been in place for nearly 40 years.
Setting an assertive tone just two weeks after being sworn in as U.S. labor secretary, Thomas Perez said in a statement that home health workers provide "vital services."
"Today we are taking an important step toward guaranteeing that these professionals receive the wage protections they deserve while protecting the right of individuals to live at home," he said.
Under a new rule, the department said home health workers, personal care aides and certified nursing assistants will be brought under the coverage of the Fair Labor Standards Act starting in January 2015.
Home care aides have been exempt from federal wage laws since 1974, when they were placed in the same category as neighborhood baby sitters. But their ranks have surged with the aging population and the field is now one of the fastest-growing professions. Perez said the workers deserve the same legal protections as most other employees.
Labor unions and worker advocacy groups have been seeking the change for years, arguing that nearly half of caregivers live at or below the poverty level or receive public benefits such as food stamps and Medicaid.
But some health care companies claim new overtime requirements will make it tougher for families to afford home care for their aging parents. Lobbyists for the $84 billion industry argue the new requirements could reduce the quality of care and even lower the take-home of caregivers if companies decide not to send workers out for shifts longer than eight hours.
President Barack Obama first proposed the rules nearly two years ago as part of broader effort to boost the economy and help low-income workers struggling to make ends meet. The Labor Department recommended revising the definition of "companionship services," which are exempt from federal minimum wage and overtime protections, to exclude home health workers.
More than 90 percent of home care aides are women. About 30 percent are black, and 12 percent are Hispanic.
The Labor Department estimated that in the United States there are 1.9 million home-based "direct care" workers, who are typically employed by healthcare agencies. Their median pay in 2010 was $9.70 per hour, or about $20,000 per year. The federal minimum wage is $7.75 per hour.
The proposed rule followed a 2007 U.S. Supreme Court decision in a case brought by Evelyn Coke, a home health worker in Queens, New York. The justices determined that the Labor Department's exemption of so-called companionship workers from the federal wage law included health workers like Coke.
When the department responded to the ruling and moved to redefine companionship care, congressional Republicans warned it would result in workers getting fewer hours and make it too costly for patients to remain at home.
"Faced with higher costs, some individuals will have no choice but to leave their homes and enter institutional living," said a joint statement from Rep. John Kline, R-Minn., and Tim Walberg, R-Mich., who serve on the House Education and the Workforce Committee.
Labor officials estimate the rule would increase Medicare and Medicaid costs by less than three tenths of 1 percent of what federal and state governments spend on the programs.
Perez said in a conference call with reporters that these concerns were not borne out by outcomes in states that have already extended their wage-and-hour laws to direct-care workers in homes.
Twenty-one states and the District of Columbia extend state minimum wage laws to home health workers. Fifteen of those also grant such workers overtime benefits.
It is "unfair" to lump these professionals into a category intended for "teenage babysitters," Perez said on the call.
Workers who are employed directly by an individual or family to provide "fellowship and protection," such as companionship in a home setting, are exempt from the rule. Workers employed by an individual or family to perform medical tasks will be covered.
Democratic lawmakers, advocates and labor leaders praised the adoption of the final rule.
Henry Claypool, executive vice president of the American Association of People With Disabilities, said it will address an "institutional bias," and enable home workers to reach wage parity with those performing the same tasks in medical centers and other facilities.
The leader of the AFL-CIO, the largest federation of U.S. labor unions that represents more than 13 million workers, said after Tuesday's announcement that workers like Coke should be covered by the country's "most basic labor standards."
"Congress intended that these hard-working individuals, whose labor is often physically and emotionally demanding, have the protection of our nation's most basic labor standards," AFL-CIO President Richard Trumka said in a statement.
Al Jazeera and wire services
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