Seyfarth Synopsis: If Donald Trump makes good on his plans to deregulate industry, then some states may assume the regulatory mantle. To understand the practical implications for the home care industry, one need only look to the expanding list of states to enact domestic workers’ bills of rights.
For decades, home care agencies classified their care workers as exempt from federal minimum wage and/or overtime requirements under the companionship and live-in domestic service worker exemptions to the Fair Labor Standards Act. Under the Obama administration, the U.S. Department of Labor’s Wage and Hour Division scrutinized the home care industry and, in October 2013, issued its Home Care Final Rule. That rule, intended to go into effect on January 1, 2015, provides that workers employed by third-party agencies no longer qualify for either exemption. The Wage and Hour Division began enforcing the new regulations in late 2015, after an unsuccessful challenge to the rule in federal court, and has been in the process of reshaping the industry.
But with Donald Trump’s election win, all this may change. Some in the industry are eyeing opportunities to head off planned regulatory initiatives and even roll back existing regulations like the one discussed above. For its part, the GOP has made clear that it intends to prioritize the home care industry in its policy initiative aimed at health care reform. In a subsection of the Party Platform called “Restoring Patient Control and Preserving Quality in Healthcare,” Republicans noted that “[o]ur aging population must have access to safe and affordable care,” signaling that they will “make homecare a priority in public policy and will implement programs to protect against elder abuse.”
Home care employers may find that the new administration steps back from the home care enforcement initiative. That may be good news in itself, but it is not the complete story. If the DOL eases its enforcement efforts, then that may spur regulatory activity on the state and local level.
Take a look at what is happening in Illinois. Governor Bruce Rauner and the state’s General Assembly are battling over whether to cap the working hours of caregivers paid by the state and whether to increase the minimum wage for these workers. The Governor is concerned that the federal home care regulation would explode state elder care budgets, while the General Assembly is facing pressure from workers and their unions who fear deflated wages.
Governor Rauner and the General Assembly have found common ground before. They enacted the Domestic Workers’ Bill of Rights which went into effect on January 1, 2017. Under that law, “domestic work” is defined to include, among other things, “caregiving, personal care or home health services for elderly persons or persons with illness, injury, or disability who require assistance in caring for themselves.” This means that protections for these domestic workers will be extended under the state’s human rights and wage and hour laws. In enacting some version of a so-called “bill of rights” for domestic workers, Illinois joins New York, California, Massachusetts, Hawaii, Connecticut, and Oregon.
Anticipating the U.S. Department of Labor’s new realignment, one may expect that workers and labor unions will increase pressure upon receptive state and local politicians. As it seeks the ear of the Trump administration, the home care industry is wise to keep its eye on the agendas of state and local governments.