Tag Archives: overtime pay

With New Protections Tied Up in the Courts, Home Health Care Workers Aren’t Waiting Around

Originally published in The American Prospect on April 3rd, 2015.
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Almost two years after the Obama administration extended historic labor protections to the nation’s 1.79 million home healthcare workers, those new rights remain in limbo. In September 2013, the Department of Labor (DOL) announced plans to amend a longstanding regulation that has excluded them from earning the federal minimum wage, overtime pay, and compensation for travel on the job. For home healthcare workers in the United States—a group that is nearly 90 percent female—this move marked a significant step towards setting a floor of decent labor standards.

But the rule-change, which was set to go into effect on January 1st, now faces a challenge in federal court, and critics say state legislators are using the ongoing litigation as an excuse to avoid implementing the new protections. At the same time, given that most home healthcare workers are paid through Medicaid and Medicare—two underfunded public programs—many also worry that states will respond to the rule-change by curtailing consumers’ access to quality care. Activists across the country are working to pressure their lawmakers to reckon with these new standards and avoid potential calamity.

Four decades ago, Congress decided that home healthcare workers should be classified more like babysitters who provide “companionship,” rather than as workers entitled to basic protections. Nursing home employees, by contrast, are fully covered under the Fair Labor Standards Act (FLSA), despite performing many of the same tasks. As home healthcare has ballooned in recent years, these occupational distinctions have become harder to justify.

According to the Bureau of Labor Statistics, the U.S. will need one million new home healthcare workers by 2022. But the work is draining, the pay is paltry, and turnover is high. When adjusted for inflation, home healthcare workers’ average hourly wages have declined by nearly 6 percent since 2004. In 2013, the average earnings of home healthcare workers totaled just $18,598. 2013 was also the year that the Obama administration decided it was well past time to update FLSA’s policy. Because the DOL has the authority to amend federal regulations, it was able to enact this change without seeking Congress’s approval.

Though the new DOL rule-change would most directly benefit home healthcare workers, it carries implications for all domestic workers, including nannies and housekeepers. “By improving the conditions and protections in one area, you’re broadly boosting the sense that this is dignified work,” says Elly Kugler, an attorney with the National Domestic Workers Alliance, (NDWA) a group representing domestic workers in the United States.

Whether that change will actually be implemented is another question. Last year three industry groups filed a lawsuit against the DOL rule-change, insisting that it would have a “destabilizing impact” on home healthcare and hurt millions of elderly individuals. On December 22, 2014, a D.C. district judge vacated the rule for third-party employers, arguing that the executive branch cannot make such a regulatory change. A few weeks later, the same judge also vacated FLSA’s revised definition of “companionship services.” The DOL filed a challenge in appeals court, and arguments will be heard later this spring. Some suspect this may ultimately make its way to the Supreme Court.

Then, on March 20th, Labor Secretary Tom Perez sent a letter out to all 50 governors, urging them to focus on budgeting the minimum wage and overtime protections now, “to ensure that [they] will prepared if the Department prevails” in appeals court. Across the country, activists are also pressuring their representatives to focus on these issues. Yet many lawmakers are using the litigation as an excuse to avoid reckoning with the thorny budgetary questions. This means workers may not see minimum wage, overtime, and travel pay increases anytime soon.

“In Georgia, we’re seeing that our lawmakers are not talking about these issues,” says Tamieka Atkins, who leads Atlanta’s chapter of NDWA. “They have the attitude that we’re not going to move on this until the lawsuit comes down.” In response, Atkins’ group launched a campaign to lobby lawmakers and health agency commissioners in advance of their next legislative session. They also started a petition—“Governor Deal: All Eyes Are On Georgia”—asking for gubernatorial support towards minimum wage and overtime.

Activists in Texas are also applying pressure to their leaders. In January, domestic workers launched a home healthcare campaign, bringing together consumer groups, disability rights organizations, and labor unions. The following month—for the first time ever—domestic workers traveled to Austin to share their personal stories and lobby state legislators. “It was a really great opportunity because we agitated on different levels,” says Mitzi Ordonez, a domestic worker organizer at the Fe Y Justicia Worker Center in Houston. “What we found is that many of the lawmakers just didn’t know about these [DOL] changes.”

Compared to Texas and Georgia, some states have made greater progress towards implementing the new labor protections. California, which already pays its home healthcare workers minimum wage, allocated new funds for overtime pay in its 2014-2015 budget, and was prepared to pay workers more at the start of 2015. But after learning about the federal lawsuit, California Governor Jerry Brown decided to postpone the overtime pay, even though there is nothing legally obligating him to do so. Frustrated activists have launched a campaign in protest; they organized meetings with state legislators, held rallies and candle light vigils, and even set up a“Justice for Homecare Tribunal”—a mock trial against the state. “The best thing for us to do is to not rest on our laurels,” says Doug Moore, the executive director of the United Domestic Workers of America. “The governor wants this to go through the courts, but we will use pressure to change his position.” Moore says that if the DOL rule-change is upheld in appeals court, they will then move to demand retroactive overtime pay back to January 1st.

Yet for some states that have reckoned with the rule-change, the results haven’t always been encouraging. “What we have been seeing, unfortunately, is that you can equally comply with FLSA by paying overtime and travel time, or by setting caps on the number of working hours,” says Alison Barkoff, the Director of Advocacy at the Bazelon Center for Mental Health Law. This scenario is playing out in states like Arkansas, which is looking to cap homecare workers to just 40 hours per week, and to limit each worker to just one customer per day. In effect, this would enable states to avoid paying workers overtime and travel costs. But such measures will hurt employees who make their living by piecing together multiple part-time jobs. It may also impact consumers who need more than 40 hours of care, or who may have a harder time finding someone willing to work for just a few hours per day.

Some hope that the Americans With Disabilities Act (ADA) and the Olmstead v. L.C. Supreme Court case, both of which protect disabled individuals from discrimination and unjustified segregation, will help consumers fight back against cuts to healthcare services. “The ADA and Olmstead provide important protections to consumers, but they won’t completely prevent a state from implementing restrictive policies,” Barkoff explains. “The laws do not prohibit a state from capping worker hours, so long as the state has a process for exempting individual consumers who will be seriously harmed. Most consumers will have to shift the way their care is provided.”

Meanwhile, labor activists maintain that their interests are not at odds with those of healthcare consumers, because quality care depends on creating sustainable working conditions. Many in the disability community have also signed amicus briefs in support of extending minimum wage, travel time, and overtime protections to home healthcare workers. “I think it’s important to know that there isn’t just one disability rights community,” says Sarah Leberstein, an attorney with the National Employment Law Project. “Many groups are very supportive, but they’re also really concerned about states taking it seriously and implementing the rules in a thoughtful way that doesn’t result in cuts to services.”

Even if upheld, the DOL rule-change may be hard to enforce. In New York City—a place that has instituted a progressive domestic workers’ bill of rights and a paid sick leave policy—activists have learned first-hand how enforcing these types of laws can be quite challenging.

“It’s really hard to be reliant on a complaint-driven process where workers have to come forth, but still fear retaliation,” says Irene Jor, a New York organizer with NDWA. Many domestic workers are also isolated in private homes, without much regular interaction with other workers who might provide them with moral support to raise grievances. Even once complaints are filed, not all are likely to be dealt with. “The Department of Labor, both on the federal and state level, is incredibly underfunded and does not have enough investigators,” says Leberstein. “So often they can’t simply respond quick enough, and they can’t do targeted enforcement.”

Nevertheless, if the DOL rule-change were upheld, it would be an important achievement. Some businesses would certainly have to adjust their operations to accommodate the new labor protections, but supporters of the rule-change insist that the industry’s opposition is overblown. According to national surveys, less than 10 percent of home healthcare workers even report working more than 40 hours a week. “We’ve also got many examples of big home care agencies that have figured out ways to pay workers properly, and still provide good care,” says Leberstein, who points out that many organizations already operate in states that require minimum wage and overtime protections. “So they’ve either figured out a way to do it and still earn profits, or they’re admitting to violating the laws in their state.”

Asking the public to pick between providing quality care and treating workers fairly is ultimately a false choice wrought through a political culture of austerity. States could avoid this by increasing funds towards Medicare and Medicaid, which would help ensure that the disabled and elderly can access the high-quality and flexible care without compromising national labor standards and worker dignity.

Though the future of the law is still unknown, one thing is clear. This is an issue that cannot be put on hold—thousands of health homecare workers live in poverty and 10,000 more baby boomers turn 65 every single day.

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CPAC Labor Panel Does GOP No Favors in Outreach to Latinos, Women

Originally published in The American Prospect on March 2nd, 2015.

CPAC Labor Panel

Photo Credit: Rachel Cohen, CPAC Conference 2015

On February 26, day one of the Conservative Political Action Conference (CPAC) in National Harbor, Maryland, a panel convened on the state of the labor movement. To describe the tone of presenters as triumphant would be an understatement. At the Thursday afternoon breakout session titled “There’s No ‘I’ in Teamsters: Obama’s Bow to Big Labor Bosses,” panelists discussed a long list of topics, ranging from the salaries of top union leadership to “pernicious” attacks on franchisers of fast-food restaurants, whose workers have taken to the streets to demand predictable schedules and livable wages.

Indeed the anti-labor forces represented here found much to be happy about, and the speakers could hardly contain their glee.

“Labor policy is one area where our side is actually winning,” boasted Mark Mix, president of the National Right to Work Committee.

To a large extent, their confidence is certainly justified. Mix was speaking less than 24 hours after the Wisconsin Senate passed a so-called right-to-work bill—legislation that would make it illegal to require that employees pay fees to unions, effectively hurting unions’ ability to bargain and organize. If, as he is expected to do, Governor Scott Walker signs the bill, Wisconsin will become the 25th U.S. state to enact such a law.

But when it comes to the labor rights of domestic workers, the right’s self-assuredness at CPAC was overstated. If nothing else, its leaders’ intransigence against the rights of the largely female and non-white workforce in this sector is bound to hurt the image of the Republican Party, with which the anti-labor forces are allied.

Tammy McCutchen, a CPAC panelist who formerly worked in the Department of Labor (DOL), accused the Obama administration of trying to “devastate the home care industry”—referring to the administration’s attempt to ensure that the nation’s more than two million domestic workers receive guaranteed overtime pay. Through an old provision in the Fair Labor Standards Act (FLSA) known as the “Companionship Services” exemption, domestic workers have been left out of the minimum wage and overtime pay protections that most other workers are entitled to. In 2013, the DOL announced that it would begin to extend FLSA protections to the majority of domestic workers. Though the start date was pushed back, the expanded protections are still expected to go into effect later this year.

The median wage for domestic workers (also commonly referred to as home health and personal care aides) is $9.70 per hour. With an expected job growth of 70 percent between 2010 and 2020 as the baby-boom generation enters its golden years, domestic care is easily one of the fastest-growing industries in the nation. Low wages and minimal labor protections are an economic non-sequitur in a sector where demand is positioned to quickly outpace supply.

In 2012, the National Domestic Workers Alliance (NDWA) published the first national survey of domestic workers in the U.S. It found that although domestic workers play an increasingly important role in the U.S. economy, their work is unregulated and highly prone to exploitation. Nearly a quarter of all workers were paid less than the state minimum wage, and 60 percent of workers reported spending over half their income on rent or mortgage payments. NDWA’s labor organizing has been gaining prominent recognition. In 2012, NDWA Director Ai-Jen Poo was named one of Time magazine’s 100 Most Influential People in the World, and in 2014 she was named a MacArthur Foundation Fellow to continue her work organizing domestic workers.

But at CPAC, McCutchen didn’t mention any of this. She didn’t mention that the vast majority of the home care workers are women of color. She didn’t mention the historic Domestic Workers’ Bill of Rights that passed in New York, Hawaii and California. Instead, McCutchen pretended as though all the momentum in domestic labor organizing has come through the overreach of faceless bureaucrats in government agencies and from a power-hungry president. And she insisted that the regulations would greatly hurt the industry, leaving our aging parents to suffer.

It’s unsurprising that labor-minded conservatives would be so proud of themselves at CPAC, what with union membership declining, and the recent spate of anti-union victories at the state level. But the right’s refusal to reckon with the growing domestic workers movement could come at a cost. As the Republican Party tries to improve its image among women and minorities—the very people who fill most low-wage jobs—doubling down on anti-worker policies will only dampen its appeal.

How Can Obama Fix Overtime Pay?

Originally published in The JHU Politik on April 13th, 2014.

The Obama administration recently announced plans to revise overtime pay regulations under the Fair Labor Standards Act (FLSA). Under the law, employees who work more than 40 hours per week are entitled to time-and-a-half in overtime pay, but many categories of employees—notably “executive” and “administrative”—are exempt under FLSA. Unfortunately, within the last decade many employers have found ways to misclassify their workers as executives, managers and administrators in order to avoid paying them overtime. Now the Department of Labor wants to update the regulations by both tightening the duties that employees would have to perform in order to be recognized as managers and by raising the minimum salary threshold above $455 per week.

The Obama administration isn’t the first to amend the 1938 regulations. Back in 2004, Bush administration officials raised the minimum weekly salary threshold from $250 to $455 (or yearly salaries of slightly under $24,000 per year). They also relaxed the description of duties, effectively weakening the exemption standards for managers. This meant that fewer workers were now entitled to overtime pay than before. (Some economists argued that this regulation effectively barred more than six million workers from receiving overtime.)

At an International Association of Fire Fighters legislative conference in March, U.S. Labor Secretary Tom Perez said in a speech, “As a result of a loophole that was written into the regulation in 2004 by the Bush administration, quite literally somebody can work 1 percent of their time on management issues, 99 percent stacking the shelves and doing other work that has nothing to do with management, and you’re considered a manager, and you are no longer entitled to overtime.”

The original law purports to prevent employers from misclassifying their workers as managers. Indeed, regulation 29 CFR 541.2 states, “A job title alone is insufficient to establish the exempt status of an employee. The exempt or nonexempt status of any particular employee must be determined on the basis of whether the employee’s salary and duties meet the requirements of the regulations.”

However, there remain enough ambiguities that employers have found ways to still misclassify their workers and avoid paying overtime. Notably, one regulation codified in 2004 states that the law will henceforth recognize employers working “concurrent duties” of “exempt and non-exempt work” on a “case-by-case basis”—meaning that one could still be considered a manager or executive even if they are not doing managerial or executive work.

The White House is also talking about raising the minimum salary threshold. According to Betsey Stevenson, a member of the White House Council of Economic Advisers, there are 3.1 million people who would have been automatically covered by overtime provisions had the threshold kept up with inflation. 

Since 2004, the Consumer Price Index has increased by about 23.3%. So had the minimum salary threshold kept up with inflation, it would now be around $560 per week. All things considered, that’s still pretty low. The Washington Post reported that officials are considering raising the threshold to somewhere between $550 and $970 a week, or $28,600 and $50,440 a year.

The key point to understand is that just doing one of these measures is not enough to eliminate the perverse incentives in FLSA. Raising the salary threshold without tightening the duties test to be considered a manager might raise the salary of some workers but it would still allow employers to misclassify their employees as managers, and thereby skirt overtime pay.

There are also macroeconomic arguments for fixing the regulation. “By discouraging the use of overtime, we will be encouraging companies to hire more workers. This is simple logic,” wrote co-director of the Center for Economic and Policy Research, Dean Baker in an email. “If a company needs extra labor, but now has to pay a premium for working people overtime, it is more likely to fill this demand by hiring new workers. This is what we want.”

While the process of revising FLSA could extend until 2015, the administration’s initiative is good news. If the Department of Labor does this revision right, then employers will have to either pay more workers overtime, or hire additional employees. Both are desirable outcomes.