Senators Mike Johanns (R-Neb.) and Lamar Alexander (R-Tn.) on Thursday joined 11 other senators in introducing the Companionship Exemption Protection Act, which will preserve a 1975 law exempting those who provide the unique work of in-home companion services from certain labor requirements, now threatened by a rule proposed by the U.S. Department of Labor.
Senator Johanns said, “Providing seniors and people with disabilities care at home gives them the option of leading a more independent life. This proposed change to a decades-old rule would take that opportunity away from many families by driving up costs and could force them to put loved ones in institutionalized care facilities. The cost of such care is often more expensive and paid through Medicaid – further straining state budgets.”
Senator Alexander said, “This rule is a classic example of Washington coming up with a well-meaning idea that might look good in a newspaper headline but that does far more harm than good for seniors, workers, and taxpayers already struggling in the Obama economy, so Congress must prevent its implementation and allow seniors to continue to get the care they need in an affordable way.”
On Dec. 27, 2011, the U.S. Department of Labor issued a proposed rule to effectively eliminate regulations that have exempted domestic workers providing in-home companionship services from federal minimum wage and overtime requirements. This proposed rule would dramatically alter how the companionship exemption has been defined and applied under federal law since 1975, including eliminating the exemption for in-home care workers who are employed by third-parties, which are mainly small businesses.
On March 20, 2012, Senators Johanns and Alexander joined 12 other Senators in submitting comments objecting to the proposed rule and requesting that the Department withdraws it, noting:
"At a time when federal policies should help foster a favorable economic environment for private sector job creation, this proposed rulemaking will only preclude many employers from expanding and adding new jobs. It will particularly hurt the small businesses that comprise the vast majority of companionship service employers, which have limited resources and are unable to cover the added costs of overtime. The rulemaking will actually reduce incomes for millions of workers who already earn salaries above minimum-wage when their employers reduce employee hours and commensurate salaries to avoid overtime costs. It may also increase the costs of in-home companionship service delivery without a corresponding increase from third party payers, including Medicaid. In fact, this rule could inherently force many seniors into institutional care by severely limiting the availability of affordable in-home care for middle and working class families.
On March 14, 2012, Senator Alexander, in a hearing of the Senate Appropriations Committee’s Subcommittee on Labor, Health and Human Services, and Education, and Related Agencies, asked Labor Secretary Hilda Solis why a more thorough economic analysis wasn’t made before proposing this rule and whether she or her staff had consulted “a single state Medicaid director when developing the rule,” since “Medicaid is 24 percent of state budgets, on average.” Ultimately, Secretary Solis told Senator Alexander that she didn’t know “off-hand,” but that she would, as Senator Alexander put it, “consult with Medicaid directors about the effect of the proposed rule.”