Home care workers obtained an important victory last Friday when a federal appeals court decided in favor of the new rule by the Obama administration to pay them decent compensation.
In 1974, an exception was made allowing companies to pay these workers salaries lower than minimum wage and not cover overtime. The Department of Labor changed this rule last year, requiring staffing agencies to pay at least minimum wage and overtime to home care workers. The industry appealed the decision in court and, while a judge ruled in their favor at first, the U.S courts of appeals in Washington D.C. ruled in favor of the White House. It is still unknown if the case will reach the Supreme Court.
The decision benefits the nearly 1.9 million people who belong to one of the fastest-growing industries in the country, which currently accounts for two thirds of the categories with the most job creation. The industry’s franchises are among the 5 most profitable in the nation, and it is estimated that patients are charged twice the amount that the worker gets paid, even though there are no additional costs as in other sectors.
In-home care costs nearly $60 billion per year, of which 73% come from government subsidies. The amount is growing steadily as the population gets older. It is fair that the workers – who are mostly women, half of them of color and a quarter of them immigrant – are paid more than $19,000 per year to avoid having to resort to welfare. Companies can pay more so that taxpayers do not have to subsidize these workers and their earnings. The industry, as always, says that they cannot pay more because their business model does not support it and that it would harm the workers.
Over 40 years ago, when these workers used to offer “companionship” services to the elderly an exception was made. Today, as judges rightfully say, that “company” requires more attention and knowledge. Fifteen states have tried to revise the law. It is time that the whole country ends the injustice prevailing in such a rapidly-growing sector.