[House Hearing, 110 Congress]
[From the U.S. Government Printing Office]



 
                H.R. 3582, THE FAIR HOME HEALTH CARE ACT

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                              COMMITTEE ON
                          EDUCATION AND LABOR

                     U.S. House of Representatives

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

            HEARING HELD IN WASHINGTON, DC, OCTOBER 25, 2007

                               __________

                           Serial No. 110-69

                               __________

      Printed for the use of the Committee on Education and Labor


                       Available on the Internet:
      http://www.gpoaccess.gov/congress/house/education/index.html



                        U.S. GOVERNMENT PRINTING OFFICE

38-308                         WASHINGTON : 2008
----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
Washington, DC 20402-0001


                    COMMITTEE ON EDUCATION AND LABOR

                  GEORGE MILLER, California, Chairman

Dale E. Kildee, Michigan, Vice       Howard P. ``Buck'' McKeon, 
    Chairman                             California,
Donald M. Payne, New Jersey            Ranking Minority Member
Robert E. Andrews, New Jersey        Thomas E. Petri, Wisconsin
Robert C. ``Bobby'' Scott, Virginia  Peter Hoekstra, Michigan
Lynn C. Woolsey, California          Michael N. Castle, Delaware
Ruben Hinojosa, Texas                Mark E. Souder, Indiana
Carolyn McCarthy, New York           Vernon J. Ehlers, Michigan
John F. Tierney, Massachusetts       Judy Biggert, Illinois
Dennis J. Kucinich, Ohio             Todd Russell Platts, Pennsylvania
David Wu, Oregon                     Ric Keller, Florida
Rush D. Holt, New Jersey             Joe Wilson, South Carolina
Susan A. Davis, California           John Kline, Minnesota
Danny K. Davis, Illinois             Cathy McMorris Rodgers, Washington
Raul M. Grijalva, Arizona            Kenny Marchant, Texas
Timothy H. Bishop, New York          Tom Price, Georgia
Linda T. Sanchez, California         Luis G. Fortuno, Puerto Rico
John P. Sarbanes, Maryland           Charles W. Boustany, Jr., 
Joe Sestak, Pennsylvania                 Louisiana
David Loebsack, Iowa                 Virginia Foxx, North Carolina
Mazie Hirono, Hawaii                 John R. ``Randy'' Kuhl, Jr., New 
Jason Altmire, Pennsylvania              York
John A. Yarmuth, Kentucky            Rob Bishop, Utah
Phil Hare, Illinois                  David Davis, Tennessee
Yvette D. Clarke, New York           Timothy Walberg, Michigan
Joe Courtney, Connecticut            Dean Heller, Nevada
Carol Shea-Porter, New Hampshire

                     Mark Zuckerman, Staff Director
                   Vic Klatt, Minority Staff Director
                                 ------                                

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                LYNN C. WOOLSEY, California, Chairwoman

Donald M. Payne, New Jersey          Joe Wilson, South Carolina,
Timothy H. Bishop, New York            Ranking Minority Member
Carol Shea-Porter, New Hampshire     Tom Price, Georgia
Phil Hare, Illinois                  John Kline, Minnesota


                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on October 25, 2007.................................     1

Statement of Members:
    Wilson, Hon. Joe, ranking minority member, Subcommittee on 
      Workforce Protections......................................     4
        Prepared statement of....................................     6
    Woolsey, Hon. Lynn C., Chairwoman, Subcommittee on Workforce 
      Protections................................................     1
        Prepared statement of....................................     3
        Additional submissions:
            Prepared statement of Mike Oxford, executive 
              director, Topeka Independent Living Resource Center    55
            Prepared statement of Laura Reyes, president-elect, 
              United Domestic Workers of America (AFSCME)........    60

Statement of Witnesses:
    Becker, Craig, associate general counsel, Service Employees 
      International Union (SEIU).................................    10
        Prepared statement of....................................    12
    Butler, Manuela, home health care worker of District Council 
      1707, Local 389, of the American Federation of State, 
      County and Municipal Employees (AFSCME)....................     8
        Prepared statement of....................................     9
    Claypool, Henry, policy director, Independence Care System...    46
        Prepared statement of....................................    47
    Dombi, William A., vice president for law, on behalf of the 
      National Association for Home Care & Hospice, Inc..........    39
        Prepared statement of....................................    41
    Robinson, Alfred B., Jr., Ogletree, Deakins, Nash, Smoak & 
      Stewart....................................................    19
        Prepared statement of....................................    20
    Seavey, Dorie, director of policy research, Paraprofessional 
      Healthcare Institute.......................................    22
        Prepared statement of....................................    25


                H.R. 3582, THE FAIR HOME HEALTH CARE ACT

                              ----------                              


                       Thursday, October 25, 2007

                     U.S. House of Representatives

                 Subcommittee on Workforce Protections

                    Committee on Education and Labor

                             Washington, DC

                              ----------                              

    The subcommittee met, pursuant to call, at 9:35 a.m., in 
room 2175, Rayburn House Office Building, Hon. Lynn Woolsey 
[chairwoman of the subcommittee] presiding.
    Present: Representatives Woolsey, Payne, Bishop of New 
York, Hare, Wilson, Price, and Kline.
    Staff present: Aaron Albright, Press Secretary; Tylease 
Alli, Hearing Clerk; Jordan Barab, Health/Safety Professional; 
Lynn Dondis, Senior Policy Advisor for Subcommittee on 
Workforce Protections; Jeffrey Hancuff, Staff Assistant, Labor; 
Robert Borden, Minority General Counsel; Rob Gregg, Minority 
Legislative Assistant; Taylor Hansen, Minority Legislative 
Assistant; Victor Klatt, Minority Staff Director; Alexa 
Marrero, Minority Communications Director; Jim Paretti, 
Minority Workforce Policy Counsel; Molly McLaughlin Salmi, 
Minority Deputy Director of Workforce Policy; Linda Stevens, 
Minority Chief Clerk/Assistant to the General Counsel; and 
Loren Sweatt, Minority Professional Staff Member.
    Chairwoman Woolsey [presiding]. A quorum is present. The 
hearing of the Workforce Protections Subcommittee on H.R. 3582, 
the Fair Home Health Care Act, will come to order.
    Pursuant to Committee Rule 12(a), any member may submit an 
opening statement in writing which will be made part of the 
permanent record.
    I now recognize myself, followed by Ranking Member Joe 
Wilson, for an opening statement.
    So I thank you all for coming. And, as I said, 9:30 a.m. is 
kind of off step around here, so you will be surprised that 
other members will come in and go, ``Oh, my goodness, I have 
missed a half-hour of this.''
    But we are going to have a hearing on H.R. 3582, the Fair 
Home Health Care Act, which provides home health care workers 
with minimum labor protections under the Fair Labor Standards 
Act. I introduced this legislation in response to a recent 
Supreme Court decision, Long Island Care at Home Ltd. v. Evelyn 
Coke, where the Court found that Evelyn Coke was not entitled 
to the minimum protections of FLSA, particularly overtime pay.
    Senator Harkin has introduced the companion bill in the 
Senate.
    Evelyn Coke, who unfortunately could not be with us today, 
worked as a home health care worker for Long Island Care at 
Home, a for-profit home health care agency, for 20 years. Home 
health care was her vocation, and she worked an average of 42 
hours a week caring for the elderly and the disabled. Sometimes 
she was required to work 24-hour shifts. But she was not paid 
overtime during her two decades of work.
    The Supreme Court found that Ms. Coke fell into a narrow 
exemption created by Congress in 1974. Ironically, when 
Congress created the exemption, it did so in the context of 
expanding FLSA to cover most domestic workers, such as 
chauffeurs and housekeepers, who previously had no labor 
protections.
    The Congressional Record from that period shows that 
Congress did not mean to exclude home health care workers, but 
only those workers who provided ad hoc services for the elderly 
and disabled, only for workers who were ``babysitters.'' So it 
was a mistake, and it needs to be corrected.
    Nonetheless, the Court found that Congress's intent was not 
clear and that it meant to delegate the details of the 
exemption to the Department of Labor, and it upheld a 
Department of Labor regulation that exempted caregivers who 
worked for third parties from FLSA protections.
    So I suppose we could argue whether the Supreme Court's 
decision was technically correct. But I do know that it was bad 
policy, absolutely, and if it is allowed to stand, it continues 
the exploitation of a segment of America's workforce--mostly 
made up of women and minorities--a segment that does really 
important and difficult work and barely makes a living wage.
    Moreover, there is nothing in the decision that 
acknowledged what most of us know, that home health care has 
changed drastically since 1974, when caregiving was largely 
provided by family and friends. Today, about 2.4 million 
workers are employed by nursing homes, home health care 
agencies, assisted living and other residential facilities. 
Over 800,000 of these workers provide in-home care.
    As the baby boomers age, this need is going to grow hugely. 
According to one estimate, in the year 2000, 13 million elderly 
needed caregiver services. By 2050, this number will grow to 27 
million, from 13 million to 27 million. And the disabled 
population needing care is also going to grow during this 
period from 5 million to 8 million.
    And I doubt very much that they have taken into 
consideration the returning wounded Iraqi vets when they came 
up with that number.
    So, today, already, there is a shortage of home health care 
workers. Turnover is very, very high, and nearly one-half of 
the home health care workers leave their jobs each year. So 
this, in turn, impacts the quality of care for people and, in 
many cases, disrupts their care to the point where they are 
unable to stay at home.
    And the main culprit is low pay. The average home health 
care worker makes less than $10.00 an hour, about half of what 
other workers earn. More than 20 percent of home health care 
workers actually live in poverty themselves and need public 
assistance just to make ends meet. I mean, that is just 
unacceptable. And, oftentimes, they do not have the work 
benefits that most of us rely on, such as health care, vacation 
and sick time.
    This work is difficult. It is taxing both physically and 
emotionally and must be honored.
    So I know that there are those who worry that if we pay 
home health care workers a decent wage, the disabled will not 
be able to afford in-home care, and I know that there are 
others who say that Medicaid and Medicare costs will soar, 
which will ultimately mean a cut-back in services for those who 
need it the most.
    But in some states, such as Michigan and Minnesota, they 
already pay overtime to home health care workers and, 
certainly, the sky has not fallen in those states. It is 
working. Those states recognize that it is simply morally 
reprehensible to exclude hard-working home health care workers 
from minimum labor protections. They also recognize that these 
protections help to stabilize the workforce.
    So H.R. 3582, the Fair Home Health Care Act, providing 
minimum wage labor protections, will be debated today. We will 
have the hearing. We will ask you questions.
    But I want to make sure everybody knows that this bill does 
not cover occasional caregivers. It does not reach live-in 
caregivers either because they are already exempted from 
overtime, but not minimum wages. It simply ensures that home 
health care workers are paid what they deserve.
    So I look forward to exploring the issues with you and 
hearing your presentations, and I honor you for being here.
    And I now yield to my ranking member, Mr. Wilson.
    [The statement of Ms. Woolsey follows:]

Prepared Statement of Hon. Lynn C. Woolsey, Chairwoman, Subcommittee on 
                         Workforce Protections

    Thank you for coming here today for this legislative hearing on 
H.R. 3582, the Fair Home Health Care Act, which provides home health 
care workers with minimum labor protections under the Fair Labor 
Standards Act (FLSA).
    I introduced this legislation in response to a recent Supreme Court 
decision, Long Island Care at Home Ltd. v. Evelyn Coke, where the Court 
found that Evelyn Coke was not entitled to the minimum protections of 
the FLSA, specifically overtime pay.
    Senator Harkin has introduced a companion bill in the Senate.
    Evelyn Coke, who unfortunately could not be with us today, worked 
as a home health care worker for Long Island Care at Home, a for-profit 
home health care agency, for 20 years.
    Home health care was her vocation and she worked an average of 42 
hours a week caring for the elderly and disabled.
    Sometimes she was required to work 24-hour shifts.
    But she was not paid overtime during her 2 decades years of work as 
a home health care worker.
    The Supreme Court found that Ms. Coke fell into a narrow exemption 
created by Congress in 1974, well over 30 years ago.
    Ironically, when Congress created the exemption, it did so in the 
context of expanding the FLSA to cover most domestic workers---such as 
chauffeurs and housekeepers---who previously had no labor protections.
    And the Congressional Record from that period shows that Congress 
did not mean to exclude home health care workers from the FLSA, but 
only those workers who provided baby sitting services for an elderly or 
disabled person on an ad hoc basis.
    Nonetheless, Court found that Congress' intent was not clear, and 
that it meant to delegate the details of the exemption to the 
Department of Labor. And it upheld a DOL regulation that exempted 
caregivers who worked for 3rd parties from FLSA protections.
    I suppose we can argue about whether the Supreme Court's decision 
was technically correct. But I do know that it was bad public policy, 
and if allowed to stand, continues the exploitation of a segment of 
America's workforce--mostly made up of women and minorities--that does 
important and difficult work and barely makes a living wage. Moreover, 
there is nothing in the decision that acknowledged what most of us 
know: that home health care has changed drastically since 1974, when 
caregiving was largely provided by family and friends. Today, about 2.4 
million workers are employed by nursing homes, home health agencies, 
assisted living and other residential facilities. Over 800,000 of these 
workers provide in-home care.
    As the baby boomers age, this need is going to explode. According 
to one estimate, in 2000, 13 million elderly needed caregiver services. 
By 2050, this number will grow to 27 million. And the disabled 
population needing care is also expected to grow during this period 
from 5 to 8 million. But even today there is a shortage of home health 
care workers. Turnover is very high, and nearly one-half of the home 
health care workers leave their jobs each year.
    This in turn impacts on the quality of care people receive and in 
many cases disrupts their care to the point where they are unable to 
stay at home. The culprit is low pay. The average home health care 
worker makes less than $10.00 an hour, about half of what other workers 
make. More than 20% live in poverty, and nearly half need some sort of 
public assistance to barely make ends meet.
    And they oftentimes do not have the work benefits that most of us 
rely upon, such as health care, vacation and sick time.
    This work is difficult and is taxing, both physically and 
emotionally.
    Now I know that there are those, including members of the 
disability community, who say that if we pay home health care workers a 
decent wage, the disabled we will not be able to afford in-home care.
    And I know that there are others who say that Medicaid and Medicare 
costs will soar, which will ultimately mean a cut-back in services to 
those who need it most.
    These concerns are overblown. After all, at least 16 states, under 
their own state laws--including California, New Jersey, New York, 
Illinois and Minnesota--already pay overtime to some or all of their 
home health care workers.
    And the sky has not fallen in those states.
    These states recognize that it is simply morally reprehensible to 
exclude hard-working home health care workers from minimum labor 
protections.
    H.R. 3582, the Fair Home Health Care Act restores minimum labor 
protections to these workers.
    It doesn't cover occasional caregivers, and it doesn't reach live-
in caregivers either, who are already exempted from overtime but not 
minimum wages.
    It simply ensures that home health care workers are paid the bare 
minimum of what they deserve. I look forward to exploring the issues 
that this legislation presents and look forward to hearing the Panel's 
testimony.
                                 ______
                                 
    Mr. Wilson. Thank you, Madam Chairwoman.
    And thank you for scheduling this hearing at an early hour. 
I want to commend you on getting people together.
    Good morning, and welcome to our witnesses.
    Before we begin, I would like to particularly welcome a 
good, longtime friend and fellow South Carolinian, Mr. Alfred 
Robinson. I had the good fortune of having served with Alfred 
in the South Carolina General Assembly, as he represented 
Pickens County, and I particularly appreciate his extraordinary 
academic background of being a graduate of Washington and Lee 
University in Lexington, Virginia. I know firsthand of its 
rigorous standards because I graduated from Washington and Lee 
several years before Alfred. Additionally, we are fellow 
graduates of the University of South Carolina Law School, one 
of America's finest law schools.
    Turning to the subject of our hearing this morning, 
certainly, one of the most important labor laws in our Nation 
is the Fair Labor Standards Act. Since 1938 and subject to 
various amendments, the FLSA has provided that a covered 
nonexempt employee is entitled to be paid a Federal minimum 
wage and be paid overtime at time and a half when he or she 
works more than 40 hours a week. Since its enactment, the FLSA 
has been the lynchpin of our Nation's wage and hour laws and 
has provided protections to literally hundreds of millions of 
workers. The FLSA represents the collective wisdom of Congress, 
the legislators who originally drafted the act and those who 
have subsequently amended it.
    Often in these instances, Congress has struck a balance 
between competing policies. The issue before us today, I 
believe is one of those instances. In the Fair Labor Standards 
Act's amendments of 1974, Congress exempted from minimum wage 
and overtime requirements certain workers who are ``employed in 
domestic service employment to provide companionship services 
for individuals who, because of age or infirmity, are unable to 
care for themselves.''
    The 1974 amendment struck a balance between the protection 
of companionship service workers and the needs of elderly and 
infirm patients to obtain this care in these services. That 
balance recognizes that increasing the cost of companion care 
services by way of minimum wage and overtime requirements, it 
is likely to result in a hardship to many who need these 
services but for whom they would become too costly.
    The Department of Labor is charged with administering this 
law and issuing regulations under it. There has been 
significant debate and litigation relating to the Department's 
regulations regarding companion care workers and specifically 
the question of whether the law exempts only those workers who 
are paid directly by the individual to whom these services are 
provided or whether the exemption covers all companion care 
workers irrespective of the technicalities of how they are 
paid.
    Through public rulemaking, the Department of Labor has 
taken the latter view that the exemption extends to cover all 
companion care workers. Earlier this summer, the United States 
Supreme Court, in a unanimous 9-to-0 decision known as Long 
Island Care at Home, upheld the authority of the Department of 
Labor to interpret these provisions of the Fair Labor Standards 
Act. They found that the Department's interpretation was a 
lawful one.
    The legislation before us today appears intended to 
overturn that decision. I use the word ``appears'' advisedly, 
and I am glad of the fact that we are having a legislative 
hearing on this issue and the bill in particular. I am 
interested in hearing our witnesses today speak about the text 
and provisions of H.R. 3582. I would like their views as to 
whether this bill simply voids the regulation at issue in Long 
Island Care or whether it, in fact, goes beyond that. Some have 
suggested that H.R. 3582 will result in the companion care 
exemption becoming so limited as to be meaningless. I would 
welcome our witnesses' views on that as well.
    It is important as we consider legislation in this area 
that we are mindful of the consequences of our actions. I 
suspect we will hear more today again that this is a matter of 
fundamental fairness for these workers, and I respect those 
witnesses who hold those views. But, as I mentioned earlier, 
the exemption of certain companion care workers from minimum 
wage and overtime represents a deliberate choice by Congress. 
Limiting or eliminating the exemption will absolutely serve to 
increase costs, not just for employers and agencies, but also 
for the Federal and state governments who pay for these 
services by way of programs like Medicare and Medicaid. That, 
in turn, is likely to have consequences for patient care. These 
are the issues I would like to explore today.
    In closing, let me again say I appreciate the opportunity 
to examine this legislation in our subcommittee this morning. I 
welcome our witnesses, and I yield back my time.
    [The statement of Mr. Wilson follows:]

Prepared Statement of Hon. Joe Wilson, Ranking Republican, Subcommittee 
                        on Workforce Protections

    Good morning, and welcome to our witnesses. Before we begin, I'd 
like to particularly welcome a good, old friend and fellow South 
Carolinian, Mr. Alfred Robinson. I've had the good fortune to have 
served with Alfred in the South Carolina General Assembly as he 
represented Pickens County, and I particularly appreciate his 
extraordinary academic background of being a graduate of Washington and 
Lee University in Lexington, Virginia. I know firsthand of its rigorous 
standards because I graduated from Washington and Lee several years 
before Alfred.
    Turning to the subject of our hearing this morning: Certainly one 
of the most important labor laws in our nation is the Fair Labor 
Standards Act. Since 1938, and subject to various amendments, the FLSA 
has provided that a covered, non-exempt employee is entitled to be paid 
a federal minimum wage, and be paid overtime at time-and-a-half when he 
or she works more than forty hours in a week. Since its enactment, the 
FLSA has been the linchpin of our nation's wage-and-hour laws and has 
provided protections to literally hundreds of millions of workers.
    The FLSA represents the collective wisdom of Congress--the 
legislators who originally drafted the Act, and those who have 
subsequently amended it. Often in these instances, Congress has struck 
a balance between competing policies. The issue before us today I 
believe is one of those instances.
    In the Fair Labor Standards Amendments of 1974, Congress exempted 
from minimum wage and overtime requirements certain workers who are 
``employed in domestic service employment to provide companionship 
services for individuals who (because of age or infirmity) are unable 
to care for themselves.'' The 1974 Amendments struck a balance between 
the protection of companionship service workers, and the needs of 
elderly and infirm patients to obtain this care and these services. 
That balance recognizes that increasing the cost of companion care 
services by way of minimum wage and overtime requirements is likely to 
result in a hardship to many who need these services, but for whom they 
would become too costly.
    The Department of Labor is charged with administering this law, and 
issuing regulations under it. There has been significant debate and 
litigation relating to the Department's regulations regarding companion 
care workers, and specifically the question of whether the law exempts 
only those workers who are paid directly by the individual to whom 
these services are provided, or whether the exemption covers all 
companion care workers, irrespective of the technicalities of how they 
are paid. Through public rulemaking, the Department of Labor has taken 
the latter view--that the exemption extends to cover all companion care 
workers.
    Earlier this summer, the United States Supreme Court--in a 
unanimous, nine to zero decision known as Long Island Care at Home--
upheld the authority of the Department of Labor to interpret these 
provisions of the Fair Labor Standards Act. They found that the 
Department's interpretation was a lawful one. The legislation before us 
today appears intended to overturn that decision.
    I use the word ``appears'' advisedly, and I am glad of the fact we 
are having a legislative hearing of this issue and the bill in 
particular. I am interested in hearing our witnesses today speak about 
the text and provisions of H.R. 3582. I would like their views as to 
whether this bill simply voids the regulation at issue in Long Island 
Care, or whether it in fact goes beyond that. Some have suggested that 
H.R. 3582 will result in the companion care exemption becoming so 
limited as to be meaningless. I would welcome our witnesses views on 
that, as well.
    It is important as we consider legislation in this area that we are 
mindful of the consequences of our actions. I suspect we'll hear more 
than once today that this is a matter of ``fundamental fairness'' for 
these workers--and I respect those witnesses who hold those views. But 
as I mentioned earlier, the exemption of certain companion care workers 
from minimum wage and overtime represents a deliberate choice by 
Congress. Limiting or eliminating that exemption will absolutely serve 
to increase costs--not just to employers and agencies, but also to 
federal and state governments, who pay for these services by way of 
programs like Medicare and Medicaid. That in turn is likely to have 
consequences for patient care. These are the issues I'd like us to 
explore today.
    In closing, let me say again that I appreciate the opportunity to 
examine this legislation in our Subcommittee this morning. I welcome 
our witnesses, and yield back my time.
                                 ______
                                 
    Chairwoman Woolsey. Thank you.
    I would like to introduce our very distinguished panel of 
witnesses who are here this morning in the order that they will 
speak.
    First, we will hear from Manuela Butler. She has been a 
home health care worker for over a decade. She currently cares 
for an elderly woman with dementia who needs round-the-clock 
care. She is a lifelong resident of Brooklyn, New York.
    Craig Becker serves as associate general counsel to the 
AFL-CIO and the SEIU Union. He served as a partner at 
Kirschner, Weinberg & Dempsey and taught labor and employment 
law at UCLA, the University of Chicago and Georgetown Law 
School. He has written numerous articles on labor and 
employment law and recently represented Evelyn Coke before the 
Supreme Court. He is a graduate of Yale College and Yale Law 
School.
    Alfred Robinson, Jr., is shareholder of Ogletree Deakins, 
LLP. Previously, he has served as the acting administrator and 
deputy administrator of the wage and hour division at the 
Department of Labor. Mr. Robinson was a member of the South 
Carolina House of Representatives from 1992 to 2002.
    So we should be referring to you as the honorable--I am 
sorry, Mr. Robinson--the honorable Mr. Robinson.
    Mr. Wilson. He is honorable.
    Chairwoman Woolsey. He is. He graduated from Washington and 
Lee University and received his law degree from the University 
of South Carolina.
    Dr. Dorie Seavey is the director of policy research for the 
Paraprofessional Healthcare Institute where she conducts 
research on economic, financial and policy issues affecting the 
direct-care workforce in the long-term care industry. She has 
served as an investigator at the Center for Social Policy and 
as a researcher at the Radcliffe Institute for Advanced 
Studies. Dr. Seavey has been published extensively in a variety 
of professional publications. She graduated with a BA from 
Stanford University and received her Ph.D. in economics from 
Yale University.
    William Dombi is the vice president for law at the National 
Association for Home Care and director of the Center for Health 
Care Law. He specializes in legal, legislative and regulatory 
advocacy on behalf of patients and providers of home health and 
hospice care. Mr. Dombi has extensive experience in health 
policy litigation and holds both a bachelor's and law degree 
from the University of Connecticut.
    Henry Claypool is currently the policy director of 
Independence Care System where he focuses on policy that 
promotes the health and independence of people with 
disabilities on Medicare and Medicaid. He previously worked at 
the Social Security Administration and at Advancing 
Independence, an advocacy firm, to promote the self-sufficiency 
of individuals with disabilities. Mr. Claypool also worked at 
the Department of Health and Human Services in a number of 
capacities focusing on disability policy. He is a graduate of 
the University of Colorado.
    I welcome all of you. This is going to be a great panel.
    And for those of you who have not testified before the 
committee before, let me explain our lighting system. We have 
the 5-minute rule. When you begin speaking, the light will be 
green. When you have completed 4 minutes, it will turn to 
yellow, and that would be a good time to start wrapping up. 
Five minutes is the maximum amount of time, but we do not cut 
you off mid-sentence or mid-thought. I promise you that. But 
when the red light goes on, please know that your testimony 
should be complete.
    So we will hear from Ms. Butler, our first witness.

      STATEMENT OF MANUELA BUTLER, HOME HEALTH CARE WORKER

    Ms. Butler. Good morning. My name is Manuela Butler, and I 
thank you for inviting me to testify today. I am a home health 
care worker. I am a member of District Council 1707, Local 389, 
which is part of the American Federation of State, County and 
Municipal Employees.
    For the past 17 years I have been a home health care 
worker. It is physically demanding, dirty, difficult, 
emotionally challenging, but it can be satisfying. I have been 
deeply touched by all the people for whom I have worked and 
cared for. I am proud of my work.
    For the past decade, I have worked with a woman who has 
dementia and diabetes. Mrs. G. is 92 years old. I have seen the 
progress of dementia. It has taken away memories.
    I am nervous.
    Chairwoman Woolsey. Do not be nervous. We are nice.
    Ms. Butler. Okay.
    It takes away the ability to perform basic activities of 
daily life. Mrs. G. can no longer walk, sit up, bathe herself, 
cook, feed herself or clean her house, dress herself, shop for 
food or even use the toilet. But because of what I do for Mrs. 
G. 42 hours a week, from 8 in the morning until 8 at night, she 
could live in her home. She is still the queen of her castle. 
Dementia can change a person, but it will never take Mrs. G.'s 
humanity because my work preserves her independence. What I do 
as a home health care worker helps Mrs. G. keep her dignity.
    Mrs. G. cannot sit up. She spends most of her time in bed. 
I bathe her each morning, cook her breakfast. I also prepare 
her lunch and dinner. I ask her what she would like to eat like 
she is in a restaurant. It is the little things that can 
maintain independence.
    Because Mrs. G. is in bed most of the day, we must be very 
careful to prevent pressure sores. Using a mat and draw sheet, 
I move her every 2 hours, wash her bottom, change her diaper. I 
also lift her and move her to be showered. I do her laundry, 
shop for her food. I update the visiting nurse and Mrs. G.'s 
family. Even though I regularly work more than 40 hours a week, 
I do not get overtime pay.
    Home care work can be dirty, difficult, but at times it can 
be also dangerous. This past April, Syndia Jean-Pierre Brye, a 
home care worker in my local union, was tragically killed on 
the job. A mentally ill family member shot her and her client 
and his family. This young woman was greatly missed by all who 
knew her. My local union and council are establishing a trust 
fund for her children.
    Unlike my current job, the agency I worked with before did 
not have a union. At my old agency, I had no paid leave, no 
health insurance and no pension. Thanks to AFSCME, I now can 
take a day off with pay if I am sick. I have health insurance. 
I have a pension plan. I am paid $9.40 an hour during the week 
and $11.00 an hour during the weekends.
    If the woman that works the night shift does not come in, I 
have to work through the night. I will get straight time pay, 
not time and a half. Under the Fair Labor Standards Act, I will 
get time and a half for my overtime for doing the same thing 
for Mrs. G. if she were in a nursing home. Because of my work, 
she could stay in her home, but I am deprived of overtime pay. 
That is just wrong and unfair.
    The Fair Home Health Care Act will protect workers like me 
who are not covered by the overtime and minimum wage 
protections under the Fair Labor Standards Act.
    In a few months, I will be 65 years old! I do not know when 
I will be able to retire. I cannot afford to retire.
    The work I do for Mrs. G. is important for the dignity and 
independence of persons with disabilities. Home health care 
workers should be respected, valued. Passing the H.R. 3582 is a 
good beginning.
    This year, you raised the minimum wage. Thank you. This 
increase was long overdue. Now you must help home care workers 
receive with overtime pay. I urge you to pass the Fair Home 
Care Act.
    Thank you.
    [The statement of Ms. Butler follows:]

   Prepared Statement of Manuela Butler, Home Health Care Worker of 
District Council 1707, Local 389, of the American Federation of State, 
                County and Municipal Employees (AFSCME)

    My name is Manuela Butler. I want to thank the Chairwoman and 
members of the Subcommittee for inviting me to testify today. I'm a 
home health care worker employed by a private, non-profit home care 
agency. I am also a member of District Council 1707, Local 389, which 
is part of the American Federation of State, County and Municipal 
Employees (AFSCME). District Council 1707 represents 25,000 community 
and social agency employees and AFSCME has 1.4 million members 
nationwide.
    For the past 17 years I have been a home health care worker caring 
for seniors with dementia and people with physical disabilities. It is 
physically demanding, dirty, difficult and emotionally challenging, but 
it can be satisfying. I have been deeply touched by all the people for 
whom I have cared. I am proud of my work.
    For the past decade, I have worked with a woman who has dementia 
and diabetes. Mrs. G. is 92. I have seen the progression of dementia. 
It can take away memories. It can take away the ability to perform 
basic activities of daily life. Mrs. G. can no longer walk, sit up, 
bathe herself, cook, feed herself, clean her home, dress herself, shop 
for food, or use the toilet. But because of what I do for Mrs. G. for 
42 hours a week, from eight in the morning until eight at night, she 
can live in her home. She is still the queen of her castle. Dementia 
may change a person but it will never take Mrs. G.'s humanity because 
my work preserves her independence. What I do as a home health care 
worker helps Mrs. G. keep her dignity.
    Because Mrs. G. cannot sit up, she spends most of her time in bed. 
I bathe her each morning and cook her breakfast. I also prepare her 
lunch and dinner. I ask her what she would like to eat today, like she 
is in a restaurant. It is the little things that can maintain 
independence.
    Because Mrs. G. is in bed most of the day we must be very careful 
to prevent pressure sores. Using a mat and draw sheet I move her every 
two hours, wash her bottom and change her diapers. I also lift her and 
move her to be showered.
    I also launder her bed linens and clothes and shop for her food. I 
update the visiting registered nurse and Mrs. G.'s family daily.
    Even though I regularly work more than 40 hours a week, I do not 
get overtime pay.
    Home care work can be dirty and difficult but at times it can also 
be dangerous. This past April, Syndia Jean-Pierre Brye, a home care 
worker in my local union, was tragically killed on the job when a 
mentally ill family member shot her, her client and his family. This 
young woman is greatly missed by all who knew her. My local union and 
council are establishing a trust fund for Syndia's three children.
    Unlike my current job, the agency I worked with before did not have 
a union. At this previous agency, I had no paid leave, no health 
insurance and no pension. Thanks to AFSCME, I now can take a day off 
with pay if I am sick. I have health insurance and we have a pension 
plan. I am paid $9.40 an hour during the week and $11.00 an hour on the 
weekends.
    Should the woman that works the night shift after me not be able to 
work, and the agency is unable to send a replacement, I will be 
required to work through the night. If this were to happen I would get 
straight time pay, not time and a half for my overtime.
    Under the Fair Labor Standards Act, I would get time and half pay 
for my overtime hours for performing the same tasks for Mrs. G. if she 
were in a nursing home facility. But because my work helps her to stay 
in her home, I am deprived of overtime pay. That's just wrong and 
unfair.
    H.R. 3582, the Fair Home Health Care Act, would protect home health 
care workers who, like me, are currently not covered by the overtime 
and minimum wage protections under the Fair Labor Standards Act.
    In a few months I will turn 65. I don't know when I will be able to 
retire. I can't afford to retire now.
    The work I do for Mrs. G. and the work other home health care 
workers do across the country, is essential for the dignity and 
independence of persons with disabilities. Our work should be respected 
and valued. Passing H.R. 3582 is a good beginning.
                                 ______
                                 
    Chairwoman Woolsey. Thank you very much.
    And Mr. Wilson had something he wanted to say.
    Mr. Wilson. Ms. Butler, the persons behind you cannot see 
this, but home health care workers are noted in your profession 
for having a very pleasant, happy, sincere smile, and you 
qualify. [Laughter.]
    Chairwoman Woolsey. Mr. Becker?

 STATEMENT OF CRAIG BECKER, ASSOCIATE GENERAL COUNSEL, AFL-CIO 
           AND SERVICE EMPLOYEES INTERNATIONAL UNION

    Mr. Becker. Chairwoman Woolsey, Ranking Member Wilson, 
other members of the committee, thank you for giving me the 
opportunity to testify here today.
    When I appeared before the Supreme Court on behalf of Ms. 
Coke, many of the Justices expressed concerns similar to Member 
Wilson about the cost of protecting home care workers by the 
Fair Labor Standards Act. I would have liked at that time to 
turn and point to my client sitting in the audience in a 
wheelchair being taken care of by her elderly son, so that the 
Justices could have understood the human cost of excluding home 
care workers from these basic minimum protections.
    The etiquette of the Supreme Court prevented me from doing 
that, so I was very happy when you invited me here to testify 
today.
    In my very brief time, I would like to make four points.
    First, when Congress extended the Fair Labor Standards Act 
to most domestic workers in 1974, it excluded babysitters and 
employees who provide ``companionship services to individuals 
who, because of age or infirmity, are unable to care for 
themselves,'' but it did not intend to open up the gaping hole 
in the Fair Labor Standards Act which exists today.
    What Congress intended in 1974 was to exempt babysitters, 
and we all understand what babysitters are, and something akin 
to babysitters. That is what the chief Senate sponsor called 
``elder sitters.'' That is, in 1974, Congress understood 
companionship services to be services provided in a casual 
neighbor-to-neighbor relationship. Congress explicitly said it 
did not intend to exempt regular breadwinners, people 
responsible for their families' support.
    Since 1974, however, this industry has changed 
dramatically, not only because the number of home care workers 
has exploded, but because the nature of their work and their 
employment relationship has changed. These are no longer 
neighbors employed on a casual basis, but employees largely 
employed by third-party agencies, most of whom who are for 
profit. The exemption is now being applied far beyond what 
Congress intended. Congress surely did not intend to exempt 
what is today the fastest-growing occupation in the country.
    Second, there is nothing about what home care workers do 
today which justifies treating them as second-class citizens, 
exempt from our Nation's most basic employment standards. This 
work they perform is no less demanding than a file clerk, a 
nursing home worker or any of the other categories of employees 
who are protected by the Fair Labor Standards Act.
    Despite the misleading term in the statute, ``companionship 
services,'' these workers perform a range of personal and 
domestic tasks which have already been described. They bathe, 
feed and move clients. They cook and clean. They assist with 
medication and using the toilet. In fact, they do almost 
everything, except sit and act as a companion. And they perform 
these essential tasks usually for two, three and four clients 
on a single day, and none of them are typically neighbors.
    Their work is emotionally and physically demanding, as 
evidenced by the fact that the rate of on-the-job injury for 
home care workers is far above the national average. I ask you 
what possible justification could there be for not giving these 
workers the right to receive the minimum wage and additional 
pay for overtime enjoyed by almost every other employee in this 
country. There is simply none.
    Third, the exemption is not only unsound employment policy. 
It is unsound long-term care policy as well. There is a growing 
shortage of home care workers due to the aging population, and 
most consumers' preference is to receive care at home as 
opposed to in an institution. This shortage is projected to 
increase dramatically.
    Low wages, obviously, contribute to this shortage, as well 
as to high turnover which impairs the quality of care, and that 
is why advocates for consumers--for example, the AARP, took Ms. 
Coke's side in the Supreme Court because they understand--those 
who advocate for consumers understand--that the greatest threat 
to the quality and availability of services is not the 
extension of the Fair Labor Standards Act, but the failure to 
extend the Fair Labor Standards Act, which will exacerbate the 
shortage of home care workers.
    Finally, opponents of the bill will tell you that it will 
increase costs and lead to reductions in services, but, as the 
chairwoman has already mentioned, many states, including my 
home state of Illinois, already protect home care workers with 
their state wage and hour law, and the quality of care in those 
states has not been diminished.
    Only a small percentage of clients receive more than 40 
hours of care per week. Therefore, the fiscal impact will be 
modest, as projected by the Clinton Labor Department.
    More importantly, there is simply no moral or policy 
justification for requiring the individuals who provide these 
essential services to bear that cost, whatever it is. There is 
no justification for asking these workers to bear the cost of 
our society's unwillingness to devote sufficient resources to 
long-term care. It will only exacerbate the shortage of workers 
and decrease the quality of care.
    I urge the members of this subcommittee to recommend 
adoption of the Fair Home Health Care Act.
    Thank you.
    [The statement of Mr. Becker follows:]

Prepared Statement of Craig Becker, Associate General Counsel, Service 
                     Employees International Union

    Chairwoman Woolsey, Ranking Member Wilson, and other distinguished 
members of the subcommittee: Thank you for giving me the opportunity to 
appear before you today. When I appeared before the United States 
Supreme Court on April 16 of this year to argue on behalf of Evelyn 
Coke in the case that gives rise to the proposed bill, H.R. 3582, the 
Fair Home Healthcare Act, several of the Justices expressed concern 
about the additional cost that would result if homecare workers 
employed by third-party agencies were protected by the minimum 
standards contained in the Fair Labor Standards Act. I would liked to 
have responded by asking the Justices to look into the audience and see 
me client, Ms. Coke, who once cared for frail elderly and disabled 
individuals, sitting in her wheel chair, being cared for by her adult 
son. I would have liked to have responded in that manner so that the 
Justices could have understood the human consequences of holding down 
costs by excluding close to one million workers who provide physically 
and emotionally demanding and often life-sustaining care for the 
elderly and disabled in their homes the right to be paid the minimum 
wage and to receive extra pay when they work overtime. The conventions 
of argument in the high court prevented me from doing that so I was 
very pleased when your Committee invited me here today to testify. 
Unfortunately, Ms. Coke is now too ill to travel so I appear here today 
to speak not only for her but for the hundreds of thousands of homecare 
workers across the country like her who labor outside the protections 
of this country's most basic labor law.
    I have represented individual workers and labor unions since 1982. 
I have taught labor and employment law at the UCLA School of Law, the 
University of Chicago Law School, and Georgetown Law School. I have 
published several articles on the Fair Labor Standards Act. For the 
past 15 years I have served as Associate General Counsel to the Service 
Employees International Union. The Union represents hundreds of 
thousands of homecare workers across the country. During that same time 
period, I have litigated a number of cases on behalf of homecare 
workers under the Fair Labor Standards Act, including the case recently 
decided by the Supreme Court, Long Island Care at Home, Ltd. v. 
Coke.\1\
The Fair Labor Standards Act and the Companionship Exemption
    The Fair Labor Standards Act (FLSA), adopted in 1938, guarantees 
American workers a minimum wage and payment at a rate of one and one-
half times their regular rate for hours worked in excess of 40 in one 
week.\2\ Adoption of these minimum employment standards was based on a 
congressional finding that employment below such standards was 
``detrimental to the maintenance of the minimum standard of living 
necessary for health, efficiency, and general well-being of workers.'' 
\3\
    However, the Act was not originally applied to domestic employees, 
maids, butlers, cooks, and similar employees who worked in private 
homes because regulating their working conditions was thought to fall 
outside Congress' power under the commerce clause. In 1961 and 1962, 
Congress extended the Act's coverage to employees employed in an 
``enterprise engaged in commerce,'' \4\ including domestic employees so 
employed.\5\ In 1974, Congress passed a sweeping set of amendments to 
the FLSA, extending the coverage of the Act in several significant 
respects, including to all domestic employees, even those employed 
solely by private households.\6\ Congress' intent at that time was to 
afford nearly universal coverage. The House Committee Report explained 
that it was ``the committee's intention to extend the Act's coverage in 
such a manner as to completely assume the Federal responsibility 
insofar as it is presently\7\ practicable.'' Such a purpose was 
consistent with the Supreme Court's observation that ``[b]readth of 
coverage'' is ``vital to [the Act's] mission.'' \8\
    While generally extending the coverage of the Act in 1974, Congress 
adopted one narrow exception to the extension of coverage to domestic 
employees--excluding babysitters and individuals providing 
``companionship services to individuals who (because of age or 
infirmity) are unable to care for themselves.'' \9\ In full, the 
resulting exemption from both the Act's minimum wage and overtime 
requirements covers: any employee employed on a casual basis in 
domestic service employment to provide babysitting services or any 
employee employed in domestic service employment to provide 
companionship services for individuals who (because of age or 
infirmity) are unable to care for themselves (as such terms are defined 
and delimited by regulations of the Secretary).
    Congress intended the exemptions of babysitters and companions to 
be parallel. Senator Harrison Williams, the primary sponsor of the 
amendments, defined a companion as an ``elder sitter.'' \10\ And both 
Committee Reports make clear that Congress did not intend exempt 
employees in either category to be ``regular breadwinners or 
responsible for their families' support.'' \11\ In adopting the 
exemption, Congress was ``not concerned with the professional domestic 
who does this as a daily living.'' \12\ Rather, Congress intended to 
exempt only the casual form of employment epitomized by the teenager 
from around the block who occasionally watches another family's 
children on a Friday night or ``people who might have an aged father, 
an aged mother, an inform father, an infirm mother, and a neighbor 
comes in and sits with them.'' \13\
    After the adoption of the amendments in 1974, however, the 
Department of Labor (DOL) adopted regulations that radically broadened 
the companionship exemption in a manner inconsistent with both 
Congress' intent and the DOL's treatment of babysitters . The DOL 
defined ``companionship services'' to include performance of a range of 
personal and domestic tasks not limited to provision of fellowship.\14\ 
In addition, the DOL provided that companions employed by third-party 
agencies and employed on a regular, even full-time, basis, unlike 
babysitters so employed, fall within the exemption.\15\
The Supreme Court's Recent Decision Applying the Companionship 
        Exemption to Homecare Workers Employed by Third-Party Agencies
    The question at issue in Long Island Care at Home, Ltd. v. Coke was 
whether the DOL's regulation providing that the companionship exemption 
encompasses employees employed by third-party agencies rather than only 
by individual consumers and their families is consistent with Congress' 
intent. The United States Court of Appeals for the Second Circuit had 
struck the regulation down, reasoning that ``[i]t is implausible, to 
say the least, that Congress, in wishing to expand FLSA coverage, would 
have wanted the DOL to eliminate coverage for employees of third party 
employers who had previously been covered.'' \16\ But the Supreme Court 
reversed, holding that because Congress did not clearly express its 
intention in 1974, the courts must defer to the DOL's construction of 
the companionship exemption.\17\ In an editorial on June 22, 2007, The 
New York Times opined, ``[T]he justices were completely silent on the 
question of whether denying overtime to home health employees is good 
policy, let along morally justifiable. Clearly it is neither.'' \18\
    I urge this Committee to recommend that Congress now make its 
intentions clear on this important question by amending the FLSA to 
provide that only employees employed on a casual basis to provide 
companionship services, and thus not employees employed by third party 
agencies, are exempt from the Act's protections.
    Excluding Homecare Workers From the Minimum Standards Contained in 
the FLSA is Both Unsound Labor and Employment Policy and Unsound Long-
Term Care Policy.\19\
    In 1974, when the exemption was adopted, homecare, like 
babysitting, was largely provided by neighbors and friends. But since 
that time a homecare industry has been created and has experienced 
explosive growth. There are now almost 25,000 homecare agencies in the 
U.S., with almost three-quarters being for-profit.\20\ For-profit 
companies employed 62% of home health care aides as of 1999.\21\ Due to 
an aging population and the fact that both the elderly and disabled 
increasing desire to remain in their homes, nonprofessional homecare is 
now the fastest growing occupation in the United State.\22\ Leaving 
this rapidly expanding, professional homecare industry outside the 
ambit of out Nation's most basic employment law is inconsistent with 
both the historic purpose of the FLSA and Congress' progressive 
expansion of its coverage since 1938. Congress should not leave this 
gaping hole in what should be the broad, nearly universal coverage of 
the FLSA.
    The continued exclusion of homecare workers from the protections of 
the FLSA cannot be justified on grounds rooted in labor and employment 
policy. Today's homecare workers can no longer be compared to the 
neighborhood teenager who babysits on a Friday night. Close to half of 
all home care workers work year-round, full-time.\23\ Despite the 
misleading term used in the statute--companionship services--homecare 
workers perform a range of personal and domestics tasks for clients 
they typically do not know before being assigned to care for them. 
Homecare workers bath, feed and move their clients. They cook for their 
clients and clean their homes. They assist their clients to take 
medication and use the toilet. They do almost everything except sit and 
provide companionship. And homecare workers often perform these 
essential services for two or more clients during a single work day. In 
fact, on average, each agency-employed homecare worker cares for five 
or more clients in an eight-hour work day.\24\
    Homecare work is physically and emotionally demanding, resulting in 
rates of occupational injury far above the average for all private 
employees (280.5 occupational injuries and illnesses involving days 
away from work per 10,000 full-time workers compared to 188.3 for all 
private industry).\25\ The injury rate in home care is worsened by the 
fact that, unlike in a nursing homes, home care aides must lift and 
transfer clients without the help of a mechanical lifting device or the 
assistance of co-workers.\26\ Home care workers often suffer emotional 
abuse from mentally impaired clients who may have severe behavioral 
problems.\27\ Homes may be ``untidy and depressing,'' and clients may 
be ``angry, abusive, depressed, or otherwise difficult.'' \28\ Workers 
who perform similar work in nursing homes and like facilities are fully 
covered by the FLSA. There simply is no valid reason why those who 
perform this work in private homes should not be similarly covered.
    Almost 90% of homecare workers are women and they are predominantly 
members of minority groups (34% African American; 18% Latina; and 20.4% 
immigrant).\29\ Exemption of homecare workers thus has a 
disproportionate impact on women and minorities and increases existing 
income inequalities. For that reason, just as women's rights advocates 
and civil rights organizations lobbied Congress to extend the FLSA to 
domestics in 1974,\30\ they now advocate closing the companionship 
loophole.\31\
    Placing homecare workers outside the mainstream of workers covered 
by our Nation's most fundamental employment standards is not only 
unsound labor and employment policy, but also unsound long-term care 
policy as we face a growing shortage of workers willing and able to 
perform these essential services. There is a well-documented and 
growing shortage of homecare workers as a result of the aging 
population and the increasing cost of and growing dissatisfaction with 
nursing home care. It is this shortage of homecare workers that led 
advocates for the aged and disabled, for example, the AARP and American 
Association of People with Disabilities to support Ms. Coke's position 
in the Supreme Court. The AARP forcefully argued that exempting 
homecare workers employed by third party agencies from ``the minimum 
requirements of the FLSA does not serve, bur rather compromises the 
interests of both older and disabled persons.'' \32\
    Employment of home health aides is projected to increase by 56% in 
the next decade, making it the fastest growing occupation in the 
Nation. Employment of personal and home care aides is expected to grow 
by 41% during the same time period, making it tenth on that list.\33\ 
As of 2004, Federal statistics documented 701,000 personal home care 
aides and 624,000 home health care aides.\34\ The Bureau of Labor 
Statistics projects that there will be a need for 974,000 home health 
aides and 988,000 personal and home care aides by 2014.\35\
    Unfortunately, the demographics of those who provide the services 
are not keeping up with those in need of them. While the population 
over age 85 will double in the next 30 years, the number of persons in 
the demographic of most home care workers will increase by just 9%.\36\ 
The General Accounting Office has developed a measure called the 
``elderly support ratio,'' which represents the ratio of women aged 20-
54 (who currently provide the vast majority of care) to persons aged 85 
and over. In 2000, that ratio was 16:1. The ratio is projected to drop 
to 12:1 by 2010, 9:1 by 2030, and 6:1 by 2040.\37\ Nor is the resulting 
care gap likely to be filled by informal, uncompensated care because 
the number of potential family caregivers for each person needing care 
is also projected to decrease from 11 in 1990 to 4 in 2050.\38\
    This labor shortage has already produced adverse consequences for 
home care clients. Medicaid home care clients have filed lawsuits in 
Federal and state court challenging home care payment rates on the 
ground that their inadequacy has caused a shortage of necessary 
services.\39\ They have documented incidents where individuals in need 
of critical services have been trapped for hours in bed or in a 
bathroom, or without food or water, because of the unavailability of 
home care aides.\40\ The critical shortage of home care aides also 
``encourage[s] unnecessary and premature institutional placements among 
Medicaid participants.'' \41\ Those unnecessary placements, in turn, 
cost the Federal and state governments far more than would otherwise be 
spent on home care services.
    The current and growing labor shortage is made worse by low wages 
and the demanding nature of the work.\42\ The AARP observes that 
``[t]he undersupply of home are workers is consistently attributed to 
inadequate wages and benefits, and the shortage of workers leads to 
both reductions in quality of care and disruption in access to care for 
older and disabled persons.'' \43\ The Bureau of Labor Statistics found 
that the earnings of home care workers ``remain among the lowest in the 
service industry,'' with a 1998 mean annual income for home health 
aides of $16,250 and for home care aides of $14,920.\44\ One in five 
home health care aides lives below the poverty level and they are twice 
as likely as other workers to receive food stamps and to lack health 
insurance.\45\
    Many potential home care workers have the option to choose jobs 
that are better paying or less demanding than home care, and those that 
do choose home care work often leave it shortly\46,47\ thereafter. File 
clerks, for example, earn significantly more than home care aides. 
Turnover, attributable to low wages as well as the physically and 
emotionally demanding nature of homecare,\48\ has been estimated at 40-
100% per year by agencies interviewed for a recent news article and at 
12-60% by the Department for Health and Human Services.\49\ This 
turnover is expensive, costing approximately $3,362 each time a worker 
needs to be replaced.\50\ It also tends to diminish the quality and 
continuity of patient care.\51\
    When the FLSA was extended to domestic employees in 1974, Congress 
recognized the positive effect coverage would have on both the size and 
quality of the domestic workforce. The Senate Committee Report 
explained: [T]he demand for household workers is not being met. 
Bringing domestics under the Fair Labor Standards Act would not only 
assure them a minimum wage but would enhance their status in the 
community. It is expected that the supply of domestic workers will 
increase as their pay and working conditions improve.
    Minimum wages should serve to attract skilled workers to these jobs 
at a time when the need for skilled domestic employees is greatly 
increasing.\52\
    The same unmet demand exists today for homecare workers and a 
similar extension of coverage would have a similar positive effect on 
that workforce. In words that apply equally to the extension of 
coverage to home care workers being considered today, Senator Javits 
explained in 1972, ``The more the job becomes dignified and recognized 
as honorable employment, such as any other employment--working in a 
factory or working here--the better it will be from the point of view 
of getting that kind of service, which Americans so urgently need.'' 
\53\ As the AARP informed the Supreme Court, ``Providing a living wage 
will attract more workers as well as increase job satisfaction and 
retention for those already providing care.'' \54\
    In 2001, the Clinton administration proposed a sweeping revision of 
the companionship regulations based on a careful analysis of Congress' 
intent and the policy interests at stake.\55\ The proposals included 
both a narrower definition of companionship services and a reversal of 
the rule exempting employees of third-party agencies. However, the 
proposals did not become final because they were withdrawn by the Bush 
administration without any form of analysis or justification shortly 
after it assumed office.\56\
    The failure of both the judicial and executive branches to address 
this critical problem demands legislative action.
Cost Objections Are Not Well Founded
    The primary objection to the Fair Home Healthcare Act is that it 
will increase the cost of homecare. This cannot be considered a valid 
objection or providers of all essential services would be exempt from 
the FLSA's protections. Yet police and fire personnel are covered, 
hospital employees are covered, nursing home employees are covered, and 
other providers of essential services are covered. Why should homecare 
workers uniquely carry the burden of society's need for their services.
    Moreover, the economic impact of the proposed legislation has been 
seriously overstated. In part this is due to a failure to consider that 
some portion of any increase in costs due to higher wages will be 
offset by savings from reduced turnover.\57\ In its 2001 proposal, the 
Clinton Administration estimated the effect on Medicare costs as 
negligible given limited expenditures for homecare services under that 
program. Additional Medicaid costs were estimated at between $30 and 40 
million, of which 57% would have been the Federal share. The combined 
public and private increase in expenditure was estimates to be no more 
than $75 million.\58\
    Suggestions that extending these minimum protections to homecare 
workers will lead to excessive costs and a deleterious effect on the 
quality of care are definitively belied by the fact that a significant 
number of states, for example my home state of Illinois,\59\ already 
cover homecare workers under their state wage and hour laws and no 
opponent of the proposed legislation has been able to point to any 
evidence of an adverse effect on long-term care in those states.
    Moreover, a large proportion of the services provided by homecare 
workers is publicly funded. Medicare and Medicaid account for more than 
half of the funds paid to free-standing homecare agencies.\60\ The 
Federal and state governments should not purchase these essential 
services at prices that depend on workers not being paid in compliance 
with the minimum standards of the FLSA. As President Roosevelt stated, 
``A self-supporting and self-respecting democracy can plead .* * * no 
economic justification for chiseling workers' wages or stretching 
workers' hours.'' \61\
    Finally, and most importantly, consumers of homecare services well 
understand that the greatest threat to their ability to secure these 
essential services is not any increase in costs that might result from 
homecare workers gaining the same rights enjoyed by virtually all other 
American workers to be paid in accordance with the minimum standards 
established in the FLSA. Rather, consumers understand that the greatest 
threat to their ability to secure such services lie in homecare workers 
not gaining that right and continuing to labor in the shadows of our 
economy. As the AARP concluded its argument to the Supreme Court in Ms. 
Coke's case, ``FLSA protections should be extended to home care workers 
* * * as such protections will strengthen the home care workforce and 
result in higher quality of care and continuity of care for America's 
older and disabled persons.'' \62\
The Fair Home Healthcare Act Is a Proper Solution to the Problem
    The Fair Home Healthcare Act would amend the Fair Labor Standards 
Act to make the exemptions of babysitters and companions parallel. The 
language of the companionship exemption would be amended by inserting 
the limiting term ``on a casual basis,'' which currently precedes only 
the term ``to provide babysitting services,'' before the term ``to 
provide companionship services'' thus exempting only employees who 
provide babysitting or companionship services ``on a casual basis.'' In 
addition, the Act would make clear that the exemption only applies to 
employees whose employment is ``irregular or intermittent'' and does 
not apply to employees ``whose vocation is the provision of babysitting 
or companionship services,'' who are ``employed by an employer or 
agency other than the family or household using such services,'' or 
whose employment exceeds 20 hours per week. These criteria are drawn 
directly from the DOL current definition of ``on a casual basis'' which 
was promulgated shortly after Congress adopted the 1974 amendments.\63\
    Domestic employees who live in the homes where they work, including 
homecare workers, would continue to be exempt from the FLSA's overtime 
provision.\64\
    In short, the Act would place under the FLSA's protective umbrella 
all employees who make their living providing the essential services 
that constitute today's homecare while leaving unprotected only those 
casual employees who do not need such protection and who Congress 
intended to exclude in 1974.
Conclusion
    I urge the Committee to recommend that Congress adopt the Fair Home 
Healthcare Act and thank you for inviting me here today to testify 
concerning the Act.
                                endnotes
    \1\ 127 S.Ct. 2339 (2007).
    \2\ 29 U.S.C. Sec. Sec.  206, 207.
    \3\ 29 U.S.C. Sec.  202(a).
    \4\ 29 U.S.C. Sec. Sec.  206(a), 207(a)(1), 203(r) and (s).
    \5\ See, e.g., Brennan v. Veterans Cleaning Service, Inc., 482 F.2d 
1362 (5th Cir. 1973); Homemakers Home and Health Care Services, Inc. v. 
Carden, 1974 U.S.Dist.LEXIS 9150 (M.D.Tenn. April 4, 1974), aff'd, 538 
F.2d 98 (6th Cir. 1976). See also 1972 DOLWH LEXIS 19 at *2-3 (Aug. 20, 
1972); Wage and Hour Opinion Letter 147, 1971 WL 33084 (Nov. 17, 1971).
    \6\ Publ. Law 93-259 (1974).
    \7\ H.R. Rep. No. 93-232, 93d Cong., 1st Sess. 8 (May 29, 1973).
    \8\ Powell v. United States Cartridge Co., 339 U.S. 497, 516 
(1950).
    \9\ 29 U.S.C. Sec.  213(a)(15). An additional exemption to the 
Act's overtime provisions was created for live-in domestic employees. 
See 29 U.S.C. Sec.  213(b)(21).
    \10\ Senator Williams explained, ``'Companion,' as we mean it, is 
in the same role--to be there and to watch an older person, in a 
sense.'' Thereupon, Seantor Burdick interjected, ``in other words, an 
elder sitter,'' and Senator Williams replied, ``Exactly.'' 119 Cong. 
Rec. 24801 (1973).
    \11\ H.R. Rep. No. 93-913, 93d Cong., 2d Sess. 36 (March 15, 1974); 
S. Rep. No. 93-690, 93d Cong., 1st Sess. 20 (Feb. 22, 1974).
    \12\ 119 Cong. Rec. 24801 (1973) (statement of Senator Burdick).
    \13\ 119 Cong. Rec. 24801 (1973) (statement of Senator Burdick).
    \14\ 29 C.F.R. Sec.  552.6 provides: As used in section 13(a)(15) 
of the Act, the term companionship services shall mean those services 
which provide fellowship, care, and protection for a person who, 
because of advanced age or physical or mental infirmity, cannot care 
for his or her own needs. Such services may include household work 
related to the care of the aged or infirm person such as meal 
preparation, bed making, washing of clothes, and other similar 
services. They may also include the performance of general household 
work: Provided, however, That such work is incidental, i.e., does not 
exceed 20 percent of the total weekly hours worked. The term 
``companionship services'' does not include services relating to the 
care and protection of the aged or infirm which require and are 
performed by trained personnel, such as a registered or practical 
nurse. While such trained personnel do not qualify as companions, this 
fact does not remove them from the category of covered domestic service 
employees when employed in or about a private household.
    \15\ 29 C.F.R. Sec.  552.109(a). The contrasting regulations 
covering babysitters are at 29 U.S.C. Sec. Sec.  552.5, 552.104, and 
552.109(b).
    \16\ 376 F.3d 118, 133 (2d Cir. 2004).
    \17\ 127 S.Ct. 2339 (2007).
    \18\ Congress and the Caregivers, The New York Times, June 21, 
2007, A22.
    \19\ The following section of my testimony has benefitted from the 
briefs of amicus curiae AARP et al., Alliance for Retired Americans et 
al., and Urban Justice Center et al. filed in Long Island Care at Home.
    \20\ National Center for Health Workforce Analyses, Nursing Aides, 
Home Health Aides, and Related Occupations viii, 12 (U.S. Dep't of 
Health and Human Servs., 2004).
    \21\ Rhonda J.V. Montgomery, et al., A Profile of Home Care Workers 
from the 2000 Census, 45:5 Gerontologist 593, 596 (2005).
    \22\ Bureau of Labor Statistics (``BLS''), U.S. Department of 
Labor, Occupational Outlook Handbook 2006-2007 (Nursing, Psychiatric 
and Home Health Aides) (available at http://www.bls.gov/oco/home.htm).
    \23\ Montgomery et al. at 595, 597; Yoshiko Yamada, Profile of Home 
Care Aides, Nursing Home Aides, and Hospital Aides: Historical Changes 
and Data Recommendations, 42:2 Gerontologist 199, 202 (2002).
    \24\ National Association for Home Care and Hospice, Basic 
Statistics about Home Care, Table 15 (2001) (available at http://
www.nahc.org/consumer/hcstats.html); National Association for Home Care 
and Hospice Care, Basic Statistics about Home Care, Table 14 (2004) 
(available at http://www.nahc.org/04HC--stats.pdf).
    \25\ Nat'l Center for Health Workforce Analysis, Nursing Aides, 
Home Health Aides, and Related Health Care Occupations 10, 109 (U.S. 
Dep't of Health and Human Servs., 2004).
    \26\ BLS (Nursing, Psychiatric and Home Health Aides; Personal and 
Home Care Aides).
    \27\ UCSF Center for California Health Workforce Studies, An Aging 
U.S. Population and the Health Care Workforce: Factors Affecting the 
Need for Geriatric Care Workers 33 (Feb. 2006) (available at http://
www.futurehealth.ucsf.edu/geria/062404-Geria%20Final.pdf).
    \28\ BLS (Personal and Home Care Aides); see also id. (Nursing, 
Psychiatric and Home Health Aides); Jane Gross, New Options (and Risks) 
in Home Care for Elderly, The New York Times, Mar. 1, 2007.
    \29\ UCSF, Health Workforce Studies, Table B2.
    \30\ Representative Shirley Chisholm led the effort to extend the 
FLSA to domestic employees. In fact, 17 of the 19 women then serving in 
Congress, representing both parties, wrote a letter to the House 
Committee expressing ``great concern'' that the extension of coverage 
to domestic workers might be dropped from the bill. H.R. Rep. 93-913 at 
34. Senator Williams recognized that ``many who watch out legislative 
activities view the coverage of domestics as an effort to remedy racial 
and sexual discrimination.'' 119 Cong. Rec. 24,799 (1973).
    \31\ The Asian American Legal Defense and Education Fund, Mexican 
American Legal Defense and Educational Fund, Puerto Rican Legal Defense 
and Education Fund, National Women's Law Center, National Partnership 
for Women and Families, and Washington Lawyers' Committee for Civil 
Rights and Urban Affairs filed a brief in support of Ms. Coke in the 
Supreme Court.
    \32\ Long Island Care at Home, Brief Amici Curiae of AARP and Older 
Women's League at 4.
    \33\ BLS (Tomorrow's Jobs); Daniel E. Hecker, Occupational 
Employment Projects to 2014, Monthly Labor Rev., Nov. 2005, at 75 
(citing BLS statistics).
    \34\ BLS (Nursing, Psychiatric and Home Health Aides; Personal and 
Home Care Aides); Hecker at 75 (citing BLS statistics).
    \35\ Id.
    \36\ William J. Scanlon (Director, Health Care Issues, General 
Accounting Office), Nursing Workforce, Recruitment and Retention of 
Nurses and Nurse Aides Is a Growing Concern: Testimony before the 
Senate Committee on Health, Education, Labor and Pensions, GAO-01750T, 
at 9 (released May 17, 2001) (available at http://www.gao.gov/
new.items/d01750t.pdf). The total working age population (persons aged 
18 to 64) will grow by just 16% during this time period. Id.
    \37\ Scanlon at 9; UCSF Health Workforce Studies at 34 (citing 
United States General Accounting Office, GAO analysis of U.S. Census 
Bureau projections of total resident population, Middle Series (Dec. 
1999)). The ratio of the entire working age population to the 
population over 85 will go from 39.5 workers per elderly person in 2000 
to 22.1 in 2030 and 14.8 in 2040. Scanlon at 9. These figures assume 
relatively high immigration, one million net annually, through 2030. 
UCSF Health Workforce Studies at 35.
    \38\ Nora Super, National Health Policy Forum Background Paper, Who 
Will Be There to Care? The Growing Gap between Caregiver Supply and 
Demand 3 (Jan. 23, 2002) (available at http://www.nhpf.org/pdfs--bp/
BP--Caregivers--1-02.pdf) (2040 projections) (citing National Family 
Caregivers Association, Family Caregiving Statistics, Kensington, 
Maryland, 2000).
    \39\ Dorie Seavey and Vera Salter, Paying for Quality Care: State 
and Local Strategies for Improving Wages and Benefits for Personal Care 
Assistants 14-17 (American Ass'n of Retired Persons: 2006) (available 
at http://assets.aarp.org/rgcenter/il/2006--18--care.pdf). The legal 
claims in these actions have been based on requirements of the Medicaid 
statute and Federal prohibitions against discrimination based on 
disability. Two cases have resulted in settlements, a Federal lawsuit 
that prompted Mississippi to agree to increase payments to personal 
care attendants by $0.50 per hour and to seek funding from the 
legislature for additional pay increases, and a state court case that 
caused New Hampshire to agree to establish a new rate-setting 
methodology based on the average cost of providers. Id. A California 
lawsuit was dismissed on the ground that the Medicaid statute does not 
confer individually enforceable rights and that the state was not 
violating disability law. Sanchez v. Johnson, 416 F.3d 1051, 1061, 
1067-68 (9th Cir. 2005). A district court order requiring Arizona to 
offer a rate of pay that guarantees that clients will receive the 
services for which they qualify is on appeal to the Ninth Circuit. Ball 
v. Biedess, 2004 WL 2566262 **6-7 (Aug. 13, 2004), on appeal sub nom. 
Ball v. Rodgers. A class has been certified and a motion to dismiss 
denied in a pending Wisconsin case. See Nelson v. Milwaukee County, 
2006 WL 290510, No. 04-C-193 (E.D. Wis. Feb. 7, 2006); Bzdawka v. 
Milwaukee County, 238 F.R.D. 469 (E.D. Wis. Oct. 13, 2006).
    \40\ See, e.g., Ball, 2004 WL 2566262 at *4 & n.3.
    \41\ Allen J. LeBlanc et al., State Medicaid Programs Offering 
Personal Care Services, 22:4 Health Care Financing Rev. 155, 170 
(2001).
    \42\ General Accounting Office, Adults with Severe Disabilities: 
Federal and State Approaches for Personal Care and Other Services, GAO/
HEHS-99-101, at 35 (May 1999).
    \43\ Long Island Care at Home, Brief Amici Curiae of AARP and Older 
Women's League at 8.
    \44\ 66 Fed. Reg. 5483 (2001) (citing BLS Occupational Employment 
Statistics survey).
    \45\ William J. Scanlon, Nursing Workforce, Recruitment and 
Retention of Nurses and Nurse Aides is a Growing Concern: Testimony 
before the Senate Committee on Health, Education, Labor and Pensions, 
GAO-01-750T, at 13 (released May 17, 2001).
    \46\ Scanlon at 12; Seavey and Salter at 1-2. In 2000, file clerks 
earned more than home health aides and significantly more than personal 
and home care aides. Paraprofessional Healthcare Institute, Long-Term 
Care Financing and the Long-Term Care Workforce Crisis: Causes and 
Solutions 19 (Citizens for Long-Term Care: 2003) (available at http://
www.paraprofessional.org/publications/CLTC--doc--rev1.pdf) (citing BLS 
data).
    \47\ Paraprofessional Healthcare Institute, Long-Term Care 
Financing and the Long-Term Care Workforce Crisis: Causes and Solutions 
19 (Citizens for Long-Term Care: 2003) (available at http://
www.paraprofessional.org/publications/CLTC--doc--rev1.pdf) (citing BLS 
data).
    \48\ BLS (Nursing, Psychiatric and Home Health Aides; Personal and 
Home Care Aides); Yamada at 204.
    \49\ Gross, New Options; National Center for Health Workforce 
Analyses et al., Nursing Aides, Home Health Aides, and Related Health 
Care Occupations--National and Local Workforce Shortages and Associated 
Data Needs 14 (U.S. Dep't Health and Human Servs.: 2004) (available at 
ftp://ftp.hrsa.gov/bhpr/nationalcenter/RNandHomeAides.pdf) (citing R. 
Stone, Frontline Workers in Long-Term Care: A Background Paper 
(Institute for the Future of Aging Services: 2001)). Super at 4 
(national turnover of 28%); Seavey & Salter at 2 (40-50% annual 
turnover); New York Association of Homes & Services for the Aging, The 
Staffing Crisis in New York's Continuing Care System: A Comprehensive 
Analysis and Recommendations 17 (2000) available at http://
www.nyahsa.org/docs/Staff.pdf (40-60% turnover in one year and 80-90% 
in 2 years).
    \50\ Robyn Stone, The Direct Care Worker: A Key Dimension of Home 
Care Policy, 16:5 Home Health Care Management & Practice 339, 341. 
Stone points out that this figure does not even take into account lost 
productivity during time that new workers are trained and gain 
experience, or the attrition between initial hiring and placement. Id.
    \51\ Stone at 341.
    \52\ S. Rep. 93-300, 93d Cong., 1st Sess. 21 (July 6, 1973). See 
also S. Rep. No. 93-690 at 19 (same); 119 Cong. Rec. 24,360 (1973) 
(``[I]n many areas of the country, including New York, * * * there are 
not enough workers willing to engage in domestic employment to meet the 
demand. Bringing minimum wage coverage to domestics will be one step, 
and a very important step, to bringing some measure of dignity to this 
type of employment and thus serve to attract a more qualified and more 
stable workforce to the job.'').
    \53\ 118 Cong. Rec. 24,705 (1972).
    \54\ Long Island Care at Home, Brief Amici Curiae of AARP and Older 
Women's League at 11.
    \55\ 66 Fed. Reg. 5481 et seq. (2001).
    \56\ 67 Fed. Reg. 16668 (2002).
    \57\ Long Island Care at Home, Brief Amici Curiae of AARP and Older 
Women's League at 1213 (and sources cited therein).
    \58\ 66 Fed. Reg. 5486.
    \59\ 820 ILCS 105/3(d), 105/4(a)(1), 105/4a and Ill. Admin. Code 
tit. 56, Sec.  210.110 (exempting individuals employed in domestic 
service but defining category to exclude ``person whose primary duty is 
to be a companion for individual(s) who are aged or infirm'')
    \60\ 66 Fed. Reg. 5483.
    \61\ Quoted in H.R. Rep. No. 93-913 at 8.
    \62\ Long Island Care at Home, Brief Amici Curiae of AARP and Older 
Women's League at 15.
    \63\ 29 C.F.R. Sec.  552.5 provides that ``the term casual basis * 
* * shall mean employment which is irregular or intermittent, and which 
is not performed by an individual whose vocation is babysitting.'' 29 
C.F.R. Sec.  552.104(b) further provides that employment ``would 
usually be on a `casual basis,' whether performed for one or more 
employers, if such employment by all such employers does not exceed 20 
hours per week in the aggregate.'' Finally, 29 C.F.R. Sec.  552.109(b) 
provides that ``[e]mployees who are engaged in providing babysitting 
services and who are employed by an employer or agency other than the 
family or household using their services are not employed on a `casual 
basis' for purposes of the section 13(a)(15) exemption. Such employees 
are engaged in this occupation as a vocation.''
    \64\ 29 U.S.C. Sec.  213(b)(21).
                                 ______
                                 
    Chairwoman Woolsey. Thank you.
    Mr. Robinson?

   STATEMENT OF ALFRED ROBINSON, JR., SHAREHOLDER, OGLETREE 
                          DEAKINS, LLP

    Mr. Robinson. Thank you, Madam Chair.
    Madam Chair, Ranking Member Wilson and honorable members of 
the subcommittee, my name is Al Robinson, and I am an attorney 
in the Washington office of the law firm Ogletree Deakins Nash 
Smoke & Stewart, and as referenced earlier, I was formerly at 
the United States Department of Labor.
    Thank you for this opportunity to speak with you about the 
Section 13(a)(15) exemption in the Fair Labor Standards Act, 
commonly referred to as the companionship service exemption, 
and the proposed bill H.R. 3582, the Fair Home Health Care Act, 
introduced by Chairman Woolsey.
    As you are aware, Congress amended the Fair Labor Standards 
Act in 1974 essentially to extend coverage of the act. However, 
included in these amendments was this exemption for 
companionship services, and specifically it exempts from the 
minimum wage and overtime protections an employee employed on a 
casual basis in domestic service to provide babysitting 
services or an employee employed in domestic service, to 
provide companionship services for individuals who, because of 
age or infirmity, are unable to care for themselves.
    In this provision, Congress also gave the Secretary of 
Labor the authority to define these terms. In 1975, the Labor 
Department did just that. They issued regulations found in 29 
CFR Part 552. In particular, Part 552.109(a), which is entitled 
the Third-Party Employment Regulation, states: ``Employees 
providing companionship services and who are employed by an 
employer or agency, other than family or household using their 
services, are exempt from the act's minimum wage and overtime 
requirements by virtue of the companionship services 
exemption,'' the 13(a)(15) exemption. Thus, the companionship 
services exemption has applied for more than 30 years to 
employees of a third-party employer or agency based upon the 
regulations of the Department which were issued in 1975.
    Also, in this regulation, the Department exercised a 
conscious decision to exempt third-party employees with this 
exemption. As part of its rulemaking responsibilities, the 
Department's proposed rule was drafted to preclude the 
application of this exemption to third-party employees. 
However, based upon the comments, the final regulation that the 
Department issued did, in fact, apply the exemption to 
employees of third parties, and Section 552.109 reads as it 
exists today. Thus, the application of the companionship 
services exemption to employees of third-party employers or 
agencies is the result of a deliberate, well-reasoned 
rulemaking process and a longstanding interpretation.
    The rationale given by the Department is persuasive and 
direct.
    First, it effectuates the statutory language and is 
consistent with prior practices. The language of the statute is 
quite clear. The companionship services apply to any employee 
providing such services. The statute does not qualify the words 
``any employee.'' It is not ambiguous. The statute does not 
contain words that restrict the application of the exemption.
    It conditions eligibility of the exemption upon the 
activities of the employee and not upon the employer who hired 
them. Many other exemptions of the FLSA do turn on the 
activities. I will just mention a couple: the bona fide 
executive, administrative or professional exemption in 
13(a)(1), agricultural in 13(a)(16). So this is very in keeping 
with other regulations and other provisions of the statute.
    In addition to effectuating the statutory language, the 
application of the companionship services exemption to 
employees of third parties is consistent with congressional 
intent. Several statements in the record made no distinctions 
between the employee working for a family member directly 
versus a third party.
    Finally, the Supreme Court, as has been referenced, 
resolved any conflict in the Department's regulations. They 
found the regulation of 552.109 as valid and controlling.
    In the little time I have remaining, I would offer a few 
observations about the legislation. Its purpose is to reverse 
the decision in the Long Island Health Care v. Coke case. 
However, I submit that it goes well beyond that intent.
    H.R. 3582 would limit eligibility for companionship 
services to the casual babysitter or companionship service 
provider in very limited circumstances, and that is they must 
be irregular or intermittent, they must be an individual whose 
vocation is not providing babysitting or companionship services 
or is an individual not employed by a third party--in other 
words, employed only by the family or household of the 
recipient--and, finally, does not work more than a total of 20 
hours a week providing babysitting or companionship services to 
one or more individuals.
    I would welcome the opportunity to address any questions 
that you may have, and I thank you for this opportunity.
    [The statement of Mr. Robinson follows:]

 Prepared Statement of Alfred B. Robinson, Jr., Shareholder, Ogletree 
                              Deakins LLP

    Madam Chair, Ranking Member Wilson and Honorable Members of the 
Subcommittee, my name is Alfred B. Robinson Jr. I am an attorney in the 
Washington office of Ogletree, Deakins, Nash, Smoak & Stewart and 
formerly was at the United States Department of Labor where I served as 
a Senior Policy Advisor, Deputy Administrator for Policy of the Wage 
and Hour Division and Acting Administrator of the Wage and Hour 
Division. Thank you for this opportunity to speak with you about the 
Section 13(a)(15) exemption in the Fair Labor Standards Act (FLSA), 
commonly referred to as the ``companionship services exemption'', and 
the proposal bill H.R. 3582, the Fair Home Health Care Act, introduced 
by Chair Woolsey.
    As you are aware Congress amended the FLSA in 1974 essentially to 
extend coverage of the Act. Included in these 1974 amendments was the 
Section 13(a)(15) companionship services exemption. Specifically, it 
exempts from the minimum wage and overtime requirements ``an employee 
employed on a casual basis in domestic service * * * to provide 
babysitting services or any employee employed in domestic service * * * 
to provide companionship services for individuals who (because of age 
or infirmity) are unable to care for themselves * * *'' 29 USC Sec.  
213(a)(15). Also, Congress granted the Secretary of Labor in this 
statutory provision the authority to define these terms by regulations.
    In 1975, the Department of Labor (Department) issued regulations in 
29 CFR Part 552to address the companionship services exemption. In 
particular, Section 552.109(a), entitled ``[t]hird party employment'', 
explicitly states:
    Employees * * * providing companionship services, as defined in 
Sec. 522.6, and who are employed by an employer or agency other than 
family or household using their services, are exempt from the Act's 
minimum wage and overtime requirements by virtues of section 13(a)(15) 
29 CFR Sec. 552.109(a). Thus, the companionship services exemption has 
applied to employees of a third-party employer or agency based upon the 
regulations of the Department since it first issued such guidance in 
1975.
    Also, Section 552.109 represents a conscious decision by the 
Department that the companionship services exemption should apply to 
third-party employers. As part of its rulemaking responsibilities, the 
Department's proposed rule was drafted to preclude the application of 
the exemption to employees of a third-party. 30 Fed. Reg. 35382, 35385 
(1974). However, in light of a thorough examination of the comments, 
the final regulation issued by the Department applied the exemption to 
employees of third-parties and Section 552.109(a) reads as it presently 
exists. Thus, the application of the companionship services exemption 
to the employees of third-party employers or agencies is the result of 
a deliberate, reasoned rulemaking process.
    The rationale given by the Department for this regulation is 
persuasive and direct--it effectuates the statutory language and is 
consistent with prior practices. The statutory language is quite 
clear--the companionship services exemption applies to ``any employee'' 
providing companionship services for aged or infirmed individuals 
unable to take care of themselves. The statute does not qualify the 
words ``any employee''. In other words, it does not restrict the 
application of the exemption, for example, to ``any employee of a 
person who receives such services or who is part of a household where a 
person received such services.'' Rather, the statute conditions 
eligibility of the exemption upon the activities of the employee and 
not upon who hired the employee.
    Many other exemptions of the FLSA turn on the activities or duties 
of an employee. For example, the Section 13(a)(1) exemption for bona 
fide executive, administrative or professional employees is determined 
according to their activities or duties, among other requirements. 
Similarly, the exemption for agricultural employees in Section 
13(a)(16) of the FLSA is determined according to the employee's 
activities, not those of the employer. This basis of reviewing an 
employee's activities to determine whether an employee is eligible for 
a particular exemption is contrasted with other exemptions that are 
employer-based. For example, one employer-based exemption is found in 
Section 7(i) of the FLSA and exempts a retail or service establishment 
exemption from overtime where the employer establishment satisfies the 
definitional requirements and pays its employees in accordance with the 
statutory requirements. Another is found in Section 13(a)(3) of the 
FLSA that exempts certain amusement or recreational establishments, 
organized camp, or religious or non-profit education conference center 
from the minimum wage and overtime requirements.
    In addition to effectuating the statutory language, the application 
of the companionship services exemption to employees of third-parties 
is consistent with Congressional intent. Several statements by Senators 
in the Congressional Record suggest that the companionship services 
exemption should apply to a person providing such services regardless 
of whether they were hired directly by the individual receiving such 
services or by a third-party retained by the individual to receive such 
services. One of the main reasons that these statements did not make 
such a distinction is because of concerns that working families would 
face increased costs for such services if the FLSA minimum wage and 
overtime requirements applied. Congressional committee reports also 
focus on the type of activities that are subject to the companionship 
services exemption. They too do not suggest that the exemption should 
be restricted based upon who employs the provider of eligible 
companionship services. It is noteworthy also that the committee 
reports state that the exemption would not apply to skilled nurses, it 
only applies to services provided in a private home and a boarding 
house where such services are provided and that operates as a business 
is not a private home.
    Finally, any suggestion that there is conflict in the Department's 
regulations was resolved by the Supreme Court in Long Island Care at 
Home Ltd. v. Coke, No. 06-593 (June 11, 2007). The Second Circuit Court 
of Appeals had relied on another regulation in Part 552. In particular, 
it looked at language in Section 552.3 to rationalize that the 
companionship services exemption can not apply to employees of third-
parties. However, such reliance was misplaced because Section 552.3, 
entitled ``[d]omestic service employment'', defines the types of 
services that would constitute ``domestic service employment'' as that 
term is used in the statute. The Court found that the language of 
Section 552.3 on the issue of third-party employment was not 
controlling, in part because the focus of that regulation is to define 
the scope or type of services that constitutes ``domestic service 
employment'' and to which the companionship services exemption applies. 
The Court ruled that Section 552.109(a) that applied the companionship 
services exemption to persons employed by third-parties was valid and 
controlling.
    In the time that I have remaining, I would offer a few observations 
about the proposed legislation, H.R. 3582. As I understand, its purpose 
is to apply the minimum wage and overtime labor standards of the FLSA 
to any provider of companionship services who is not employed on a 
``casual basis'' without defining what is meant by ``a casual basis''. 
However, H.R. 3582 would go beyond addressing the Supreme Court's 
decision in the Long Island Health Care v. Coke case, and would 
preclude the companionship services exemption from applying not only to 
an employee of a third-party but arguably also to many others who today 
are eligible for the exemption. In fact, H.R. 3582 would limit 
eligibility for the companionship services exemption only to the casual 
babysitter or provider of companionship services who: (1) is an 
irregular or intermittent employee; (2) is an individual whose vocation 
is not to provide babysitting or companionship services or is an 
individual not employed by a third-party employer but rather is 
employed by the family or household of the recipient, and (3) does not 
work more that a total of 20 hours a week providing babysitting or 
companionship service to one or more individuals. This bill would have 
the effect of applying the minimum wage and overtime requirements to 
many companionship providers who are employed by the household or 
family of the recipient. For example, if you perform casual babysitting 
or companionship services on a regular basis or do so for more than 20 
hours a week, then you would not be eligible for the Section 13(a)(15) 
exemption even if your employer was the recipient of the services or a 
household family of the recipient.
    I would welcome the opportunity to address any questions that you 
may have. Thank you.
                                 ______
                                 
    Chairwoman Woolsey. Thank you.
    Dr. Seavey?

    STATEMENT OF DORIE SEAVEY, DIRECTOR OF POLICY RESEARCH, 
             PARAPROFESSIONAL HEALTHCARE INSTITUTE

    Ms. Seavey. Chairwoman Woolsey, Congressman Wilson and 
members of the subcommittee, good morning. My name is Dorie 
Seavey. I am a labor economist and director of policy research 
at PHI, which is a national nonprofit based in the Bronx that 
works to help improve the lives of people who need home or 
residential care by improving the lives of the workers who 
provide that care.
    PHI stands firmly behind the Fair Home Health Care Act, and 
we have been asked to address the bill from a labor market 
perceptive with a focus on public policy development in the 
area of long-term care.
    I would like to touch on three points: the changed context 
for considering this bill, the problem of bad market signals 
and mixed policy messages and, finally, a word about costs.
    I would direct you to my written statement for in-depth 
analysis.
    The context for this bill could not be more different than 
the one that confronted lawmakers in 1974 at the time of the 
last set of FLSA amendments. Profound changes in the provision 
of home-based supports and services have essentially eclipsed 
the companionship services exemption.
    Significant changes have occurred in three areas: in the 
duties performed by many of the workers now classified as 
exempt; in the home care workforce itself, which now totals 
over 800,000, recently topping the size of the nursing home 
care workforce; and, finally, in the size and structure of the 
home care industry.
    There is no question that home care occupations are now 
bona fide forms of employment that generally are not performed 
on a casual basis. Nonetheless, home care workers need and 
deserve basic protections. The remuneration of this workforce 
is notoriously low with mean annual earnings of under $15,000. 
About a third of home care aides have no health insurance and, 
shockingly, nearly half of these aides live in households that 
receive some kind of public assistance, such as Medicaid or 
food and nutrition assistance.
    Propelled by demographic and other trends, home care is a 
rapidly expanding multibillion-dollar industry in which for-
profits constitute the fastest-growing segment. There is also a 
booming consumer-directed market financed primarily by Medicaid 
in which consumers serve as the employer of record or as joint 
employers with agencies.
    It is my opinion that maintaining the companionship 
exemption in its current form contributes to significant 
structural problems in both the caregiver labor market and in 
workforce development for the homecare industry. Furthermore, 
the exemption works to subvert key policy goals established by 
the Federal Government concerning the development of the 
Nation's long-term care system.
    From a labor market point of view, maintaining the current 
exemption in only one segment of the long-term care labor 
market creates distortions and artificial segmentation of 
caregiver labor markets across the entire system. Strikingly, 
this same work performed by an aide in a nursing home is 
unambiguously covered by minimum hour and wage protections. By 
supporting this kind of disparity, the exemption impedes the 
normal functioning of markets and serves to undermine the 
development of a stable, adequate workforce of paid caregivers 
to provide home and community-based services.
    From a workforce development perspective, the exemption 
acts as a barrier to the overall status of this occupation 
relative to other low-wage jobs. The bottom line is it is 
basically impossible to construct any economic arguments as to 
why other domestic or home-based service jobs, such as maids, 
cooks, housekeepers and gardeners, should receive this basic 
protection, but home care workers should not.
    Lastly, from a Federal policy vantage point, not extending 
minimum compensation standards to these workers will only serve 
to send conflicting messages that undermine several important 
elements of Federal policy. To mention the biggest one, this 
exemption in its present form works to subvert the Federal 
Government's encouragement of rebalancing. That is the 
expansion of home and community-based services relative to 
those provided in institutional settings, such as nursing 
homes.
    The costs of this bill need to be carefully and thoroughly 
explored on a state-by-state basis. However, several factors 
suggest that extending basic employment protections to non-
live-in home care workers is unlikely to dramatically increase 
the nationwide cost of services or seriously disrupt service 
delivery systems, so long as steps are taken to adjust service 
delivery management accordingly.
    Four quick cost-related facts to keep in mind: Virtually, 
all home care workers currently are paid at least the Federal 
minimum wage. Live-in home care workers would continue to be 
exempt from overtime under the bill. The vast majority of home 
care workers do not work over 40 hours a week. And in at least 
16 states and the District of Columbia, either all home care 
workers or significant subgroups of them are already eligible 
for overtime pay because state laws exceed the Federal 
standards.
    If the argument is that the exemption is needed to help 
make home care for the elderly and those with disabilities more 
affordable, then I would submit to you that the proper way to 
do this is not to artificially depress the market-based minimum 
cost of labor, but rather, in the case of publicly financed 
services, to make adjustments in state reimbursement rates and, 
in the case of private pay services, to use the tax code to 
subsidize the purchase of care.
    In closing, this bill offers Congress an historic 
opportunity to send three important economic and social 
signals: first, that home care workers should be on equal 
footing with respect to all other low-wage occupations; second, 
that within long-term care, the home care labor market should 
not have second-class status with respect to compensation and, 
therefore, with respect to its ability to attract and retain 
workers; and, finally, that Federal lawmakers can work together 
to coordinate rather than send conflicting messages about the 
direction of our Nation's long-term care policy.
    Thank you.
    [The statement of Ms. Seavey follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Chairwoman Woolsey. Thank you.
    I think you heard the bells ringing, but we have time for 
the final witnesses, both of you, and then we are going to come 
back for questions, if you will stay with us.
    Mr. Dombi?

 STATEMENT OF WILLIAM DOMBI, VICE PRESIDENT FOR LAW, NATIONAL 
                   ASSOCIATION FOR HOME CARE

    Mr. Dombi. Thank you, Chairman Woolsey and Ranking Member 
Wilson and the other members of the subcommittee.
    Thank you for the opportunity to come here today to express 
the views of the National Association for Home Care & Hospice. 
NAHC, as we call it, is a trade association. We represent the 
businesses that provide much of the care that we are speaking 
about today, home care aide services.
    Home care aide services takes on a different label under 
the Fair Labor Standards Act, companionship services. The 
National Association for Home Care & Hospice has long stood for 
the proposition that home care aides are the pillars of our 
long-term care delivery system. Without home care aides, such 
as Ms. Butler, it would not exist. It would have no chance of 
success. Society does not give them the level of respect and 
support that they deserve based on their dedication and their 
commitment to caring for individuals that most of us avoid even 
spending time with--the elderly, the disabled, the individuals 
who are shut into their homes and shut out of society's eyes.
    We agree with the goals of this legislation, and the goals 
of this legislation are to improve the profession of home care 
aides, stabilize it financially so that it becomes something 
that people aspire to, dedicate themselves to, continue to work 
in with a living wage. From a business standpoint, the reasons 
are very obvious. A stable workforce makes for a stable 
business, and home care is a workforce-related business.
    But while we agree with the goals, we think that this 
action and this bill actually send things going in the wrong 
direction. It sends things going in the wrong direction 
because, as Dr. Seavey mentioned, market forces are at play 
here, and there is a big difference in home care and hospice 
than there is in many of the other market-driven economies.
    We do not control the price. We do not set the price. The 
price is set by Congress on occasion, Federal administrative 
agencies and state legislatures, governors as well as state 
administrative agencies. When you cannot control the price and 
the price does not change and the providers of services are not 
reimbursed additional monies to cover additional costs, the 
only choice they have is cost avoidance.
    And while the sky has not fallen in Michigan, what has 
happened is limited, if nonexistent, overtime services provided 
by home care aides as a cost-avoidance measure. The only option 
that was available to home care providers was to discontinue 
employing home care aides beyond 40 hours. There was no further 
increase in reimbursement. In fact, in Michigan, under the 
state Medicaid programs the fights have been over decreases in 
payment rates.
    When we look at the cost of this legislation, it is a cost 
that this committee has to seriously consider. My constituency 
would embrace any change that allows them to pay a fair wage 
with overtime compensation and full employee benefits to home 
care aides because the recruitment and retention costs, the 
nightmares of going through background checks for workers who 
come in with felony-level backgrounds, is just an unacceptable 
way to operate a long-term care system.
    We do not know what the exact costs would be, but I will 
give you a few numbers. Today, $15 billion a year is spent 
under the Medicare program for home health services. About 25 
percent of that are home health aide services. In hospice, $9 
billion a year spent under Medicare with about 20 percent home 
health aide services. In excess of $20 billion a year is spent 
in state Medicaid programs on personal care supports. And then 
we have many more programs in addition to that from the 
Administration on Aging through TRICARE and even the Housing 
and Urban Development programs for home care services.
    These are all Federal and state-funded programs, and there 
are local home care programs, like in the City of New York 
where the City of New York estimated that the cost of overtime 
compensation under this bill, in its evaluation of the Supreme 
Court case, would be $100 million in New York City alone.
    As I stated earlier, the pillars of home care deserve your 
support, but they cannot get it in isolation with all the 
factors that are there. So, as an alternative to moving forward 
with this legislation, we would recommend this committee take a 
broad-based approach, look beyond just overtime compensation--
minimum wage is not an issue. These workers get minimum wage--
and, instead, I offer five different areas which this committee 
should address that will ultimately implicate compensation and 
benefits.
    Number one, mandate all Federal and state programs that 
finance home care aide services to reform payment rates to 
accommodate increased costs of improved and appropriate 
compensation.
    Two, require all Federal and state home care programs to 
provide the necessary financial support for a basic health 
insurance plan. This Congress is debating SCHIP at this point 
in time. We are talking of 200 versus 300 percent of the 
poverty level, but these individuals will not be covered 
through any SCHIP amendments that are under consideration 
today. Health insurance for health care workers should seem to 
be a minimum right.
    Number three, provide support for programs that establish 
career ladder opportunities for home care aides, including 
scholarships and grants for higher education and training. We 
have that going at the National Association for Home Care & 
Hospice now, but our few dollars that we can offer only goes a 
short way to bringing individuals who start as home care aides 
who would like to be LPNs, RNs and other health care workers.
    Number four, establish economical and efficient background 
check systems to allow for expedited screening of applicants 
for home care aide employment. In Wisconsin, 30 percent of 
applicants for home care aide jobs were found to have felony-
level backgrounds. We do not want them in the system, but we do 
not want to keep individuals like Ms. Butler waiting in the 
wings to come into the delivery system as well.
    And last, require consistent employee protections across 
all forms of home care aide employment, including Workers' 
Compensation, Unemployment Compensation, OSHA job safety 
standards and worker qualifications. The trend across the 
country is to bring in individual providers without that 
protection.
    So thank you for your time and your patience.
    [The statement of Mr. Dombi follows:]

  Prepared Statement of William A. Dombi, Vice President for Law, on 
    Behalf of the National Association for Home Care & Hospice, Inc.

    Thank you for the opportunity to present testimony regarding H.R. 
3582. My name is William A. Dombi, Vice President for Law at the 
National Association for Home Care & Hospice, Inc, (NAHC). In 
Washington, D.C. NAHC is a trade association representing the interests 
of home health agencies, home care organizations, and hospices 
throughout the country. Our membership includes entities of all sizes 
and types including not-for profit and proprietary organizations. These 
providers of care are freestanding companies, government-based, or part 
of a health system. All told, NAHC members serve over 5 million of the 
Nation's elderly and disabled citizens with personal and skilled care 
that enables these individuals to maximize functioning and stay safely 
in their own homes.
    H.R. 3582 is of great interest to the home care community as the 
providers of home care services employ tens of thousands of workers 
that could be impacted by the proposed revision to the ``companionship 
services'' exemption under the Fair Labor Standards Act of 1974 (FLSA). 
In home care, the worker who provides services that would be considered 
``companionship services'' generally works under the title of home 
health aide, home care aide, or personal care attendant. These workers 
are the pillars of support for a growing community based long term care 
system that our Nation needs to respond to the graying of America.
    H.R. 3582 follows on the heels of a recent decision of the U.S. 
Supreme Court in LI Care at Home v. Coke where a unanimous Court upheld 
the validity of a 30 year old regulation of the US Department of Labor 
that exempted individuals who are employed by third parties to provide 
companionship services from the protections of the FLSA with respect to 
overtime compensation. Ms. Coke argued unsuccessfully that the 
exemption applies only when the worker is directly employed by the 
person receiving care. While H.R. 3582 purports to reverse the Court's 
decision, it actually would limit the FLSA exemption even in situations 
where the worker is directly employed by the person receiving care.
    The proposed legislation represents a well-intentioned effort to 
provide support for individuals working in an undervalued job. However, 
it is a piecemeal action that will not only fail to solve the important 
concerns expressed by the home care aide workforce, but will serve to 
compound their problems. Instead, NAHC calls for a comprehensive, 
broad-based strategic plan that integrates action to address worker 
compensation, access to health insurance, competencies and training, 
career opportunities, and funding. In the absence of that comprehensive 
effort, HR 3582 will trigger predictable consequences that naturally 
develop when health care providers are encumbered with added costs 
without the essential financial support to meet those increased 
obligations.
    The impact of the proposed legislation must be understood in a very 
practical context. Most funding for home care services comes from 
Federal and state programs such as Medicaid, Medicare, the 
Administration on Aging, and TRICARE. Under these programs, the 
employer of home care aides has little or no control over the price of 
services and can only act to affect the costs of care. As a result, the 
unfunded cost increases that evolve from this legislation will lead the 
employer/home care agency to control costs through such steps as 
eliminating overtime work, reducing base compensation rates to minimum 
wage, and dropping any employee benefit programs. This foreseeable 
reaction is unlike those that are only speculative in a market driven 
economy where the seller of services has the option of raising prices 
to increase revenue to offset the increased compensation costs. These 
are real consequences when the health care provider must operate in a 
system of funding that is controlled by Federal and state health care 
programs.
    Consumers of home care aide services also will suffer unintended 
consequences. Limiting hours of work for the home care aide will 
disrupt continuity of care as multiple caregivers will be assigned to 
an individual to avoid unfunded overtime compensation. The anticipated 
increase in employee turnover when workers cannot get enough work hours 
will bring consumer dissatisfaction as every day different caregivers 
arrive on the scene.
    These issues are all solvable, but not through an isolated action 
that addresses only the matter of worker compensation. NAHC sincerely 
recommends that the Committee re-direct its efforts to bring about the 
broad-based solution that is needed to protect both the worker and the 
consumer of care.
Who receives companionship services
    Companionship services, otherwise known in health care as home care 
aide and personal care attendant service, are provided to millions of 
Medicare, Medicaid, TRICARE, and private pay recipients of care. They 
are young and old, permanently disabled and chronically ill. In 2000, 
the U.S. Department of Health and Human Services reports that the 
number of individuals receiving home care services was 7,178,964.
    In 2006, Medicare expenditures for home health services provided to 
3.1 million elderly and disabled, homebound beneficiaries with 
expenditures totaling $13.2 billion. Medicaid expenditures for home 
care in 2000 reached $24.3 billion, of which $11.6 billion was spent on 
personal support services. Since 2000, Medicaid spending on home care 
has grown exponentially with a rebalancing of spending away from 
institutional care and into community-based services. Medicaid home 
care recipients are of all ages, from infant to very advanced age, all 
with one common characteristic--they must rely on others to safely stay 
at home.
    The 1974 amendment to the Fair Labor Standards Act (FLSA) that 
established the ``companionship services'' exemption at issue in this 
matter is a unique action through which Congress offered protection to 
a class of consumers rather than employees. The central feature of the 
exemption is to provide a cost protection for the elderly and the 
infirm who require personal care and other support services, known as 
companionship services, to remain in their communities and in their own 
homes.
    From the time of the 1974 amendment through today, all branches of 
the Federal Government have recognized the importance of providing 
community based care to the elderly, infirm, and disabled. For example, 
in 1980, Congress enacted amendments to the Medicare program to 
eliminate coinsurance requirements under the home health benefit in 
order to remove any barriers to care in the home that might lead to 
more costly and less humane institutional care. Section 930(h) of the 
``Medicare and Medicaid Amendments of 1980,'' P.L. 96-499, codified at 
42 USC 1395l(b)(2).
    More recently, with the enactment of the Americans with 
Disabilities Act of 1990, Congress ensured that individuals with 
disabilities be afforded the opportunity to receive public services and 
programs in the most integrated setting appropriate to their needs. 42 
USC 12101fff. The right of disabled individuals to community-based care 
under the ADA and its implementing regulations was affirmed by this 
Court in Olmstead v L.C., 527 US 581 (1999).
    The Executive Branch of the United States government also has 
weighed in heavily in favor of home care. The ``New Freedom 
Initiative'' was announced by President Bush on February 1, 2001, 
followed by Executive Order 13217, Community-Based Alternatives for 
People with Disabilities (June 18, 2001).
    The United States Department of Health and Human Service (HHS), 
which manages many of the public home care programs, set out its 
implementation of the Executive Order establishing civil rights 
compliance activities that facilitate community integration in 
``Delivering on the Promise, HHS' Report to the President on Executive 
Order 13217.'' www.hhs.gov/newfreedom/eo13217.html.) The HHS initiative 
is a nationwide effort to remove barriers to community living for 
people of all ages with disabilities and long term illness.
Profile of the home care aide/companion
    The U.S. Department of Labor, Bureau of Labor Statistics, reports 
that 663,280 workers provide companionship services as home health 
aides and personal care aides.\1\ Among the employers of these workers 
are 8,728 Medicare certified home health agencies throughout the 
country.\2\
---------------------------------------------------------------------------
    \1\ Occupational Employment Statistics, U.S. Department of Labor, 
Bureau of Labor Statistics,Occupational Employment and Wages, May 2005 
(www.bls.gov/oes/current/oes311011.html). Internet search 12/11/06.
    \2\ Centers for Medicare & Medicaid Services, Center for 
Information Systems, Health Standards and Quality Bureau, November 
2006.
---------------------------------------------------------------------------
    The bald statistics tell only a minor part of the story about home 
care aides. In the community of home care, aides are considered heroes. 
Most often, it is the aide who is the reason the patient can stay at 
home safely to receive needed health care services. The home care aide 
is generally considered to have the toughest job in home care as she 
must respond to a myriad of personal care needs of her patients ranging 
from simple bathing to managing incontinent, nonambulatory elderly 
patients with Alzheimer's Disease. Aides are task oriented, schedule 
regimented, caring people who become the equivalent of temporary family 
members providing essential caregiving with a tender touch. They care 
for people who are afflicted with chronic illness or who are recovering 
from an acute illness or injury. Aides are also significant team 
members in hospice care, providing special care to individuals at the 
end of life.
    The home care aide may care for one individual or provide services 
on a shift basis to several. Some provide visit oriented services that 
occur several times per week per patient for one to two hours a visit. 
Versatility and dependability are hallmarks of the home care aide. Most 
are women, but men also participate in this work.
    Home care aides are deserving of respect and admiration. They also 
are well deserving of society's support and recognition for their great 
contributions. They are truly heroes of home care.
The profile of home care financing
    The provision of essential care by home care aides happens only 
with the significant financial support of Federal and state health care 
and personal care service programs. It must be recognized that the 
proposed changes to the FLSA, designed to guarantee home care aides 
overtime compensation when applicable, will increase the costs of those 
important programs. In addition, the nature, structure, and operation 
of these programs demonstrates that the increased costs occurring 
through a new overtime compensation obligation will not lead to near 
term changes in reimbursement rates to reflect and reimburse employers 
of home care aides for that new cost. In fact, the experiences with 
state Medicaid programs demonstrate that payment rate changes occur 
only after access to care problems reach a crisis level.
    Medicare pays for home health services through a prospective 
payment system, 42 USC Sec. 1395fff; 42 CFR Sec. 484.200 (HHPPS). The 
HHPPS payment rate is adjusted annually through the application of a 
``market basket index,'' a sort of inflation factor. 42 USC 
Sec. 1395fff(b)(3)(B); 42 CFR Sec. 484.225.
    However, the market basket index formula and the database utilized 
to apply that formula are not designed to address sudden cost changes 
without unreasonable delay. For example, the database utilized for the 
inflation factor for the calendar year 2005 proposed rates includes 
wages and salary data from 2000. 69 F.R. 31248 (June 2, 2004).
    Compounding the problems with the Medicare market basket index 
update is the use of a wage index for geographic variation in payment 
rates. 42 USC Sec. 1395fff(b)(4)(A)(ii)i; 42 CFR Sec. 484.210(c).
    However, changes in home care aide wages will not affect payment 
rates because the home health wage index is based upon hospital 
services wage data. As a result, providers of companionship services 
will experience increased cost and unaffected Medicare payment rates.
    Medicaid payment systems are even less predictable than the 
Medicare HHPPS. States participating in Medicaid are required to 
establish payment rates sufficient to enlist enough care providers to 
secure services at a level of access comparable to the non-Medicaid 
patient population. 42 USC Sec. 1396a(a)(30)(A); 42 CFR Sec. 447.204. 
Typically, state Medicaid programs adjust payment rates only after 
individuals have lost access to necessary care. See, Arkansas Medical 
Society, Inc. v. Reynolds, 6 F.3d 519 (8th Cir. 1993); Orthopedic 
Hospital v. Belshe, 103 F.3d 1491 (9th Cir. 1997).
    In Ball, et al v. Bledess, et al, the District Court held that the 
Arizona Medicaid program home care payment rates violated 42 USC 
Sec. 1396a(a)(30)(A). CIV 00-0067TUC-EHC (D. AZ. 8/13/2004). The court 
noted that despite multiple studies and reports since 1998 indicating 
the loss of access to care triggered by inadequate payment rates, the 
state did not respond.
    Many of the Medicaid home care programs are designed around a 
standard of cost effectiveness. These programs, otherwise known as home 
and community-based care waivers, exist only to the extent that the 
cost of care is less than the cost of placement in an institutional 
setting. 42 USC Sec. 1396h(c) The increase in costs triggered by new 
overtime compensation obligations threatens the viability of these 
waiver programs and will block home and community-based care options 
for currently served individuals.
    TRICARE, the health services program for over eight million 
military dependents and retirees will also be adversely impacted. Its 
basic home health services program is built on the Medicare payment 
model referenced above. 32 CFR Part 199. In addition, its Extended Home 
Care Benefit is founded on cost-effectiveness principles comparable to 
the Medicaid waiver programs discussed herein. 69 F.R. 44942 (July 28, 
2004).
Why is the financing of home care relevant?
    The financing system for home care can be boiled down to two basic 
concepts: (1) the provider of care does not control the price of 
services; and (2) the provider of care has limited control over the 
cost of care. Addressing the pressing needs of home care aides in a 
piecemeal fashion, focusing solely on overtime compensation, compounds 
rather than solves the problems faced by home care aides.
    As the preceding discussion indicates, the price of care is 
controlled by Federal and state programs that purchase the care from 
the providers of home care on behalf of participants in the programs. 
At best, these programs are slow to act to reflect cost changes in 
payment rates. At worst, there is no reaction to increase service costs 
leading to serious access problems.
    With the inability to respond to increased costs through price 
increases, the employer of home care aides has no alternative but to 
take steps to reduce costs. Some costs cannot be avoided as they are 
creatures of regulatory standards designed to ensure quality of care. 
For example, Medicare home health agencies must meet rigorous standards 
for participation that include training and competency standards for 
home health aide service, 42 CFR 484.36. In addition, most states have 
provider licensing standards with many requiring full criminal 
background checks on all caregiving staff. In addition, the home care 
agency must manage staff recruitment, scheduling, and travel costs to 
patients' homes. As with any employer, the home care agency also must 
cover the costs of Workers' Compensation, Unemployment Compensation, 
and the Social Security tax.
    These employer obligations leave few options for the home care 
agency to control costs and respond to an increase in costs such as 
overtime compensation. In the absence of immediate changes in payment 
rates by Federal and state programs, the home care agency is left with 
two cost control options and one cost avoidance option. In terms of 
cost control, the home care agency can reduce the basic hourly wage of 
home care aides or eliminate or reduce any available employee benefits 
such as health insurance. Currently, the employee benefits are, at 
best, minimal because of currently inadequate payment rates.
    The cost avoidance option is for the home care agency to limit the 
hours worked by the home care aides, capping those hours at 40 per week 
to stay under any overtime compensation obligation.
    Who gains from this dynamic--no one! The patient loses because of 
the loss of continuity in caregivers. The home care agency loses 
because of higher recruitment costs and staff scheduling costs to 
reference just a few. The worker loses because she is subject to capped 
compensation with no alternative but to find additional supplemental 
employment.
Are there other risks with the piecemeal approach?
    The proposed legislation purports to address compensation 
protections for home care aides regardless as to whether they are 
employed by the person receiving the care or by an third party. As 
Justice Breyer pointed out during the oral argument in Coke v. LI Care 
at Home, the argument advanced by Ms. Coke would have the unacceptable 
consequence of discriminating against individuals who did not have the 
faculties or means to directly employ the home care aide by creating an 
overtime compensation obligation for individuals that needed to acquire 
care through a third party. As such, NAHC is very supportive of the 
proposal in terms of its inclusion of all home care aides within the 
minimum wage and overtime compensation protection except those that 
truly work on a casual basis. However, it can reasonably be expected 
that consumers and workers in the direct employment situation may be 
tempted by the opportunity to ``go underground'' in their arrangement 
to avoid the obligations, scrutiny, and reporting responsibilities that 
come with a formal, compliant employment relationship.
    In such circumstances, both the consumer and the home care aide are 
losers once again. The consumer loses the quality of care protections 
designed into many Federal and state laws. Oversight, worker screening 
and training, and the ready availability of substitute workers is 
sacrificed. For the home care aides, protections such as Workers' 
Compensation, Unemployment Compensation, and Social Security 
contributions are lost.
    These risks can only be addressed through a comprehensive strategy 
to enhance the status of home care aides. Focusing on the isolated 
overtime compensation concern is not a step toward that strategy. 
Instead, it is a step backward unless it is part of a plan to include 
consideration of care financing, health insurance protection, and 
career building opportunities.
A broad-based home care aide protection plan
    To insure unintended consequences triggered by this proposed 
legislation, NAHC recommends that Congress develop a broad-based 
strategic plan that provides a comprehensive approach to the protection 
of home care aides. That comprehensive protection is needed for both 
the home care aide and the individuals under their care. That plan 
should include, at a minimum, the following:
    1. Mandates for all Federal and state programs that finance home 
care aide services to reform payment rates to accommodate increased 
costs of improved compensation.
    2. Requiring all Federal and state home care programs to provide 
the necessary financial support for a basic health insurance plan for 
home care aides.
    3. Providing support for programs that establish career ladder 
opportunities for home care aides including scholarships and grants for 
higher education and training.
    4. Establishing economical and efficient background check systems 
to allow for expedited screening of applicants for home care aide 
employment.
    5. Requiring consistent employee protections across all forms of 
home care aide employment such as Workers' Compensation, Unemployment 
Compensation, OSHA job safety standards, and worker qualifications.
Comments on the language of H.R. 3582
    NAHC recommends that H.R. 3582 move forward only as part of a 
comprehensive plan to address home care aide protections and 
employment. However, as it is currently structured, the language is 
confusing and ambiguous.
    Specifically, it is unclear whether proposed subparagraphs (A) and 
(B) are intended to establish the definition of ``casual basis'' or add 
restrictions on the applicability of the ``casual basis'' exemption. 
For example, must the companionship service be both ``casual basis'' 
work and ``irregular or intermittent''? Alternatively, is casual basis 
defined as work that is irregular or intermittent?
    Similarly, the phrase ``or an individual employed by an employer or 
agency other than the family * * *,'' may be intended as a wholesale 
exclusion from the companionship services exemption or one applicable 
when involving services on a casual basis that are irregular or 
intermittent.
    With respect to subparagraph (B), it appears that the 20 hour per 
week standard may be either an additional qualification on the ``casual 
basis'' standard, an additional qualification on the ``irregular or 
intermittent'' standard, or a definition of one or both of those 
standards.
    Finally, it is ambiguous as to which employer under the ``20 hour 
in the aggregate'' standard has the responsibility for overtime 
compensation. Is it the employer who is employing the worker for the 
hours that exceed the aggregate of 40 hours that is responsible for 
overtime compensation or are the multiple employers responsible only 
when their employment itself exceeds 40 hours?
    NAHC is readily available to work with the Committee to clear up 
this confusion and these ambiguities.
Conclusion
    Home care aides are essential caregivers of the elderly and the 
disabled. They deserve comprehensive worker protections. However, by 
addressing the single concern of the application of the FLSA 
companionship services exemption to the exclusion of the interrelated 
issues of care financing, health insurance coverage, career support, 
and other matters, H.R. 3582 is a well intentioned effort that will 
have unintended adverse consequences for both consumers of home care 
aide services and the home care aides. NAHC recommends a broad-based 
strategic legislative plan to address these interrelated concerns to 
achieve the goals of H.R. 3582.
                                 ______
                                 
    Chairwoman Woolsey. Thank you, Mr. Dombi.
    Mr. Claypool?

STATEMENT OF HENRY CLAYPOOL, POLICY DIRECTOR, INDEPENDENCE CARE 
                             SYSTEM

    Mr. Claypool. Chairwoman Woolsey, Ranking Member Wilson and 
members of the subcommittee, good morning. I am Henry Claypool, 
the policy director of Independence Care System, a nonprofit 
managed long-term care plan based in New York City, serving 
more than 1,200 people with disabilities living in their homes.
    Thank you for inviting me to testify today.
    I would like to give you ICS's perspective on the Fair Home 
Health Act as both an organization that pays for the services 
of direct-care workers and as an advocate for services for 
people with disabilities. My comments are also informed by my 
own personal experience. I am a former Medicaid beneficiary, 
and I continue to rely on the supports provided by direct-care 
workers.
    We support the enactment of the Fair Home Health Act, and 
we believe that there are three major policy challenges that 
this legislation seeks to address.
    One, antiquated Department of Labor rules must be 
readjusted to address the current shortage of direct care 
workers. Competition for workers to take jobs in the service 
sector is fierce, and it makes no sense to continue to put 
direct-care jobs at a comparative disadvantage by allowing the 
erroneous categorization of workers as companions to persist.
    Two, Federal labor policies should be conducive to 
delivering high-quality services. It can be difficult to find 
someone who is capable, competent and interested in helping 
with often intimate personal needs like dressing, using the 
bathroom, and eating. The result is that many people who rely 
on community-based services struggle with quality issues on a 
daily basis. To assure quality, all workers who provide 
noncasual, non-live-in long term services should be fully 
protected by FLSA.
    Three, the current exemptions for some FLSA protections for 
direct-care workers should be eliminated or at least narrowed 
so that these protections apply equally to direct-care workers 
across all long-term services settings.
    For the disability community, the number one civil rights 
issue in this country is the need to expand access to community 
long-term services so that Medicaid beneficiaries who need 
these services are not forced to be isolated in a nursing home 
in order to receive these services. When community-based 
direct-care workers are exempt from wage and hour protections, 
it exacerbates the institutional bias by making direct-care 
jobs in nursing homes more attractive than comparable jobs in 
community settings.
    As the subcommittee moves forward with its consideration of 
this important legislation, we make the following 
recommendations.
    Consult with the Energy and Commerce Committee to fully 
consider the ramifications for the Medicaid program. Medicaid 
is an extremely complex program, and the Energy and Commerce 
Committee has accrued very significant expertise and may prove 
valuable to the subcommittee.
    Redefine the live-in exemption in a way that provides 
narrow exemptions from FLSA wage and hour protections. While 
ICS believes that Department of Labor rules have been 
misinterpreted to exempt too many workers from FLSA standards, 
we do acknowledge that some exemptions are appropriate. Careful 
consideration should be given to reclassifying certain direct-
care workers as live-in. This step should be taken, however, 
after consulting with groups that represent consumers and 
independent providers.
    In closing, I would like to thank the subcommittee for its 
efforts to protect direct-care workers and for considering how 
to ensure that Medicaid beneficiaries who depend on community-
based long-term services are not adversely harmed. ICS looks 
forward to serving as a resource to you as you continue to 
consider this important issue, and we urge the Congress to 
enact the Fair Home Health Act into law. I look forward to 
answering any questions you may have.
    [The statement of Mr. Claypool follows:]

  Prepared Statement of Henry Claypool, Policy Director, Independence 
                              Care System

    Chairwoman Woolsey, Congressman Wilson, and Members of the 
Subcommittee, Good morning. I am Henry Claypool, the Policy Director of 
Independence Care System (ICS), a nonprofit managed long-term care plan 
based in New York City, serving more than 1,200 people with 
disabilities living in their homes.
    Thank you for inviting me to testify today. I would like to give 
you ICS' perspective on the Fair Home Health Act (H.R. 3582) as both an 
organization that pays for the services of direct-care workers and as 
an advocate for services for people with disabilities. My comments are 
also informed by my own personal experience. I am a former Medicaid 
beneficiary and I continue to rely on supports provided by direct-care 
workers.
    We support enactment of the Fair Home Health Act and we believe 
that there are three major policy challenges that this legislation 
seeks to address:
    One, Antiquated Department of Labor rules must be re-adjusted to 
address the current shortage of direct care workers.
    Competition for workers to take jobs in the service sector is 
fierce and it makes no sense to continue to put direct-care jobs at a 
comparative disadvantage by allowing the erroneous categorization of 
workers as ``companions'' to persist.
    Two, Federal labor policies should be conducive to delivering high-
quality services.
    It can be difficult to find someone who is capable, competent and 
interested in helping with often intimate personal needs like dressing, 
using the bathroom, and eating. The result is that many people who rely 
on community-based services struggle with quality issues on a daily 
basis. To assure quality, all workers who provide non-casual, non-
livein long term services should be protected by FLSA.
    Three, The current exemption from some FLSA protections for home 
care workers should be eliminated or at least narrowed, so that these 
protections apply equally to direct-care workers across all long-term 
care settings.
    For the disability community, the number one civil rights issue in 
this country is the need to expand access to community long-term 
services so that Medicaid beneficiaries who need these services are not 
forced to be isolated in a nursing home in order to receive these 
services. When community-based direct-care workers are exempted from 
wage and hour protections, it exacerbates the institutional bias by 
making direct-care jobs in nursing homes more attractive than 
comparable jobs in community settings.
    As the Subcommittee moves forward with its consideration of this 
important legislation, we make the following recommendations:
    Consult with the Energy and Commerce Committee to consider fully 
the ramifications for the Medicaid program;
    Medicaid is an extremely complex program and the Energy and 
Commerce Committee has accrued very significant expertise that may 
prove valuable to the Subcommittee;
    Redefine the live-in exemption in a way that provides narrow 
exemptions from FLSA's hour and wage protections.
    While ICS believes that Department of Labor rules have been 
misinterpreted to exempt too many workers from FLSA standards, we do 
acknowledge some exemptions are appropriate. Careful consideration 
should be given to reclassifying certain direct-care workers as ``live-
in'' per diem workers whose per diem pay must be equivalent to at least 
14 hours of regular pay. This step should be taken, however, after 
consulting with groups that represent consumers and independent 
providers.
    In closing, I would like to thank the Subcommittee for its efforts 
to protect direct-care workers and for considering how to ensure that 
Medicaid beneficiaries who depend on community-based long-term services 
are not inadvertently harmed. ICS looks forward to serving as a 
resource to you as you continue to consider these important issues. We 
urge the Congress to enact the Fair Home Health Act into law. I look 
forward to answering any questions that you may have.
                                 ______
                                 
    Chairwoman Woolsey. Thank you.
    We will be back.
    [Recess.]
    Chairwoman Woolsey. I was going to have my committee 
members ask their questions first, but I am here and they are 
not. So I want to thank you all for your testimony. I am going 
to recognize myself for 5 minutes, and then I will yield to Mr. 
Wilson, and then others will be here by then.
    We are going to have a whole series of what we call--excuse 
me, Republicans--nuisance votes. So we will be running back and 
forth. But they are 15-minute votes, and they will not be held 
open very long.
    So, again, thank you, and I recognize myself for 5 minutes.
    Mr. Dombi, I have a question about these third-party 
agencies. Are they not for-profit agencies?
    Mr. Dombi. Home care agencies are both not for profit and 
for profit. Some are government-based agencies. The largest 
home care agency in South Carolina, for example, is a 
Department of Health and Environmental Control, which is a 
government agency that runs the health department and such as 
well.
    Chairwoman Woolsey. Okay. When they pay somebody like Ms. 
Butler, say, $9.00 an hour, what do they charge the client? I 
mean, where is the profit, I mean, the overhead margin?
    Mr. Dombi. Yes. In most of the instances, they are not 
charging the client. Instead, they are receiving reimbursement 
from a public program like Medicaid. So they are getting a fee 
schedule rate. By and large, the rates vary tremendously across 
the country. In a situation normally for what we call the home 
and community-based waiver programs, we see hourly payment 
rates to the home care providers as low as $9.63 and as high as 
the low $20s. Within that range, you know, you have a median 
probably in the $15 range.
    Chairwoman Woolsey. And so the health care worker takes the 
whole amount home, I mean, other than taxes, et cetera?
    Mr. Dombi. No, the health care worker takes whatever wages 
that they get home, and the health care provider then finances 
other aspects of the delivery of services. For example, in most 
of the states when they pay an hourly rate for the home care 
aide-personal care attendant they do not pay for the travel 
time, yet that is an hour worked for the worker that the 
employer has to pay. They do not separately pay for training. 
They do not separately pay for criminal background checks. They 
do not pay for any of the other overhead aspects that are there 
in the delivery of the service. They pay that as part of the 
fee schedule rate to the provider.
    Chairwoman Woolsey. Okay. Thank you.
    Now, Ms. Butler, I would like to ask you a question about 
something Mr. Dombi did say. He said that what would happen if 
we passed this legislation would be that you would no longer be 
privileged to work over a 40-hour week without getting 
overtime. Right now, you can be forced to work over a 40-hour 
week without overtime. Is that all right? I mean, you are okay 
not working over 40 hours, aren't you?
    Ms. Butler. Well, the overtime will mean to me--it will be 
$1,500 more a year. For some people, it will be a drop in the 
bucket, but, for me, it will be quite a lot of money because of 
the cost of living the way it is in New York. But I guess he is 
right. Some agencies will try to get the chance to cut down 
your hours. Then it will be very bad. But, at the same time, 
they cannot, not with the sick people the way they are.
    Chairwoman Woolsey. So you see this, rather than ensuring 
that then the other part of the day would be paid, somebody 
else would come in and earn straight time.
    Ms. Butler. But then that will be very disturbing to the 
patent because, see, we take into consideration the emotional 
problem of the elderly having people walk into their home every 
certain amount of hours so they will not pay the overtime. So, 
you know, how are we benefiting these people as it is?
    Chairwoman Woolsey. Right. I appreciate that very, very 
much. Good input.
    So, Mr. Becker, talk to us about the patient or the elderly 
person and what the difference between what quality care and 
turnover care means to them.
    Mr. Becker. Well, I think the important thing to recognize 
here in terms of the quality of care is that the most important 
factor determining quality of care is whether there is an 
available caregiver. And the greatest threat to the quality of 
care here is the threat that there will not be enough 
caregivers available to provide the care, and to keep these 
workers in the margin of the economy, to categorize them as 
less worthy than all the employees who are covered by the act, 
is only furthering that threat.
    In terms of the overtime question, when the act was passed 
in 1938 and it has been extended numerous times, including in 
1974, this argument has always been made, that protecting 
workers is actually going to turn around and harm workers 
because their hours are going to be cut and their wages are 
going to be cut. So this is really not an argument against 
closing this loophole. This is an argument against the 
principles of the Fair Labor Standards Act itself.
    Overwork is generally a problem in the health care 
industry--in hospitals, in nursing homes, in home care. It is 
generally not desirable to have people working long hours in 
this industry in particular, but in all industries. That is the 
philosophy of the Fair Labor Standards Act. The statistics show 
that very few clients receive more than 40 hours of care per 
week. So to have that care provided by individuals who do not 
work long hours would not lead to significant problems in terms 
of the discontinuity of care.
    So we think that extending the act, including the overtime 
provisions, will have a positive effect on the quality of care.
    Chairwoman Woolsey. Thank you very much.
    Mr. Wilson?
    Mr. Wilson. Again, Ms. Butler, thank you for your service.
    In our home state of South Carolina, it is very frequent in 
obituaries to see the companion care personnel listed as family 
members, which is truly an indication of the deep affection 
that the family develops with people in your profession.
    As we are facing these very important issues today, Mr. 
Robinson, as drafted, do you believe that H.R. 3582 goes beyond 
the scope of the issue decided in Long Island Care and the 
questions raised under Department of Labor regulations at issue 
in that case? In what way do you believe this bill goes beyond 
the Long Island Care?
    Mr. Robinson. Thank you, Congressman Wilson.
    Yes, I do believe it goes beyond the Supreme Court's 
decision. At issue there was the validity of the exemption 
applying to caregivers employed by third parties. The way this 
legislation is drafted, it goes beyond that because it would 
deny application of that exemption to a babysitter, to a 
companionship provider who works more than 20 hours.
    It also has a provision in there that sort of compounds, if 
you will, layers the terms ``intermittent'' and ``irregular'' 
in the statutory provision that already has the term ``casual 
basis'' in it. So it sort of is, I might say, fraught with 
confusion in that sense because you are layering on terms that 
are not defined, even though the ``casual basis'' is, in the 
regulations.
    So it could impact the babysitter that was not at issue as 
well in the Supreme Court case.
    Mr. Wilson. Mr. Dombi, you really have the perspective of 
an attorney, also being real world with the association, and in 
that context, were H.R. 3582 to become law, what do you predict 
would be the immediate consequence for companion care workers, 
the clients they serve, employers and government agencies? And 
you have already spoken about something Mr. Becker mentioned, 
and that is setting the price. Who is doing that? What do you 
predict the long-term consequences to be?
    Mr. Dombi. Well, as much as I have a crystal ball, I would 
base it on some experiences we have had, which is when a new 
cost comes to the employer, in this case the home care 
provider, and that cost is not covered by the payor of that 
service, Medicaid or Medicare, whatever, they then get into a 
cost-avoidance mode, and with respect to home care aides, I 
think they are offered three options and a combination of them 
that they can take on an immediate basis because experiences 
also say that the payment MOP systems do not respond 
immediately and may never respond at all.
    The three choices that they would have would be to avoid 
overtime compensation obligations by controlling the number of 
hours worked, and some workers might find that beneficial. They 
can reduce the base wage that is paid to that worker so that 
they could accommodate then an overtime on that, but I do not 
think anybody is real happy with taking $10 an hour and 
reducing it to $7.50 so you can afford to pay overtime when 
that occurs. Or they could dismantle or in some way diminish 
the limited benefits that are their employee benefits that 
might be available, whether they are a limited health plan or 
pension benefits.
    Those are truly the only options that are available in a 
cost-avoidance mode that occurs, none of which, in my mind, end 
up benefiting either the consumer or the worker at that point 
and, certainly, do not benefit the employer because the 
employer then is probably out there having to recruit more 
staff because staff leave as a result of those kinds of 
changes.
    Mr. Wilson. And, Mr. Robinson, you had cited the 20-hour-
per-week provision in Subsection B of H.R. 3582. So, again, 
could you restate your concerns about that?
    Mr. Robinson. Yes, sir. The way this statute is drafted, it 
could exclude from the exemption--in other words, overtime 
would apply to anybody, whether they are hired by a third-party 
employer or directly by the recipient of the services, if they 
provide more than 20 hours a week. That could be the 
babysitter, for example, the 14-year-old. Child labor regs 
limit the number of jobs you can perform. You can have a 
babysitter who performs more than 20 hours a week who could be 
impacted by this bill. You could have the person who works 
directly for the recipient of the services, if they work more 
than 20 hours a week, would be impacted by this bill. So it has 
far-reaching consequences beyond just what was addressed in the 
Long Island v. Coke case.
    Mr. Wilson. Thank you all.
    Chairwoman Woolsey. Mr. Bishop?
    Mr. Bishop. Thank you, Madam Chair. And thank you very much 
for holding this hearing.
    Dr. Seavey, in your testimony, you indicate that the vast 
majority of home care workers are already paid the minimum 
wage.
    And, Mr. Dombi, you do not dispute that.
    So that is not in question.
    Ms. Seavey. No, it is not.
    Mr. Bishop. All right. So what we are talking about here in 
terms of economic impact is primarily in terms of overtime pay. 
You have indicated, Dr. Seavey, in your testimony that the vast 
majority of home care workers do not work more than 40 hours 
per week. Do you have an approximation of what proportion of 
home care workers do on a regular basis work more than 40 hours 
a week?
    Ms. Seavey. Well, the only approximation that I have seen 
is from a Federal dataset called the Current Population 
Supplement, and the one from March 2006 showed 15 percent of 
home care workers. It is a highly constructed number. They do 
not ask you how many hours per week did you work overtime. It 
is----
    Mr. Bishop. But it is a number that is arrived at in good 
faith. I mean, 15 percent is----
    Ms. Seavey. Yes. It is a very derived number. I think it is 
on the high side.
    Mr. Bishop. All right. And is there any approximation of 
the number of hours of overtime that this 15 percent 
approximately of the workforce work?
    Ms. Seavey. I do not know that.
    Mr. Bishop. All right. Because I mean, the average salary 
is $9.95 an hour, so $10 an hour. So we are talking about $5 an 
hour of premium pay--I will put ``premium'' in quotes--for a 
small minority of health care workers. And so what are we 
talking about--3 hours a week of overtime, 4? I mean, are we 
talking $15 a week per employee per 15 percent of the 
employees? I mean, is that about right?
    Ms. Seavey. I think that is in the range, but another way 
to look at it is that if this bill were to pass, it is not the 
case that 800,000 home care workers would have any change come 
to them at all.
    Mr. Bishop. Precisely my point.
    And so I guess my question really is to Mr. Dombi. You have 
predicted rather significant consequences. You have talked 
about denial of overtime. You have talked about diminution of 
care. You have talked about withdrawal of health benefits. You 
have laid out a fairly bleak scenario in the event that this 
legislation is passed. But it seems to me that the economic 
consequences, first off, will be attributed to very, very few 
workers, and they are relatively modest.
    So my question is: How do you reconcile this at least 
apparently very modest economic consequence? Take that as fact 
one. Fact two, that we already have 16 states in which this 
appears to be working reasonably well without the onslaught of 
the consequences that you are predicting. How do you then still 
take the position that these consequences are consequences that 
ought to deter us from trying to protect a disadvantaged 
segment of the workforce?
    Mr. Dombi. Congressman, there are several factors that go 
into consideration there. I think we do not know all of what we 
really need to know about the economics of home care and in 
particular the pay scales and hours worked of home care aides. 
I would submit that because of those 16 states, one of the 
reasons why there is limited overtime compensation that is paid 
and overtime that is worked is because of the obligation to pay 
the overtime compensation. And, you know, I do not know if I--
--
    Mr. Bishop. May I just interrupt you for a second?
    Presumably, overtime is offered or scheduled because there 
is a need for it, correct?
    Mr. Dombi. It is a combination of offered and desired. The 
worker is looking for additional working hours in order to make 
ends meet.
    Mr. Bishop. No, I guess my question is if overtime is 
withdrawn or withheld by the employer, how is the care 
provided?
    Mr. Dombi. If overtime is withdrawn, how is the care 
provided? With an additional caregiver.
    Mr. Bishop. Okay. But with a paucity of caregivers--my 
understanding is that this is one of the fastest-growing 
segments of our economy, and we do not have a workforce of 
keeping up with the demand--how is that possible? How is that 
functionally possible?
    Mr. Dombi. At this point, there is sufficient supply of 
workforce to meet the existing demand. We do not believe that 
that will continue as the graying of America commands more.
    Mr. Bishop. So wouldn't providing overtime be a more cost-
effective way for the employer of providing for an increased 
demand thereby saving on recruitment costs and training costs? 
So, I mean, even if there are adverse economic consequences to 
paying slightly more per hour to a very low number of workers 
for a very low number of hours, wouldn't that be offset by 
savings in training, savings in recruitment?
    Mr. Dombi. Well, we do not know, but that is actually the 
basis of the discussion that Dr. Seavey and Mr. Claypool and I 
had during the break, which was----
    Mr. Bishop. In other words, what I----
    Mr. Dombi [continuing]. There is some theory that it would 
be cheaper for the business to provide higher wages and 
overtime compensation than to take on the cost of recruitment 
and retention and everything that goes with that, and what I 
had discussed with Dr. Seavey's organization some months ago 
and want to continue those discussions based on our further 
discussions today of joining forces and doing an analysis 
because if we can present a business model to my constituency 
that says it makes sense to do this for everybody's interest, 
then we are going to sell that from here to California.
    Chairwoman Woolsey. Okay. Mr. Kline?
    Mr. Kline. Thank you, Madam Chair.
    To the witnesses, thank you very much for being here today. 
It was really terrific testimony. It is great to have a panel 
of experts like this.
    We have just been advised by staff that the majority leader 
is going to shut off the votes very rapidly after the 15 
minutes, so the normal slack that we have had is taken away 
from us.
    Let me just say that this issue is really, really pressing, 
as many of us baby boomers are now looking at our parents and 
the needs for home health care or assisted living or nursing 
home, and so the demand is growing.
    Mr. Dombi, I think you are right that we are going to have 
a supply and demand problem here.
    So I had some questions. Perhaps we can do them for the 
record, but let me just say thank you very much for your 
testimony today.
    And I yield back, Madam Chair.
    Chairwoman Woolsey. Thank you, Mr. Kline.
    You guys all go.
    I am going to close the hearing today. I would like to say 
two thoughts have come to mind.
    In Ms. Butler's case, I thank you very much. You are the 
one that does the really hard work.
    And, Mr. Claypool, thank you because you know how necessary 
all this is.
    But the rest of you, you have been great experts.
    But in Ms. Butler's case, for 2 hours more a week, you are 
going to pay somebody's travel to and from? No way. So, I mean, 
there will be times it comes out ahead.
    I am sorry. We cannot do anymore.
    And then I would like to say the other thing that comes to 
mind is that we really need a national health care system in 
this country. What a difference that would make.
    So I am going to tell you again thank you very much. And, 
if we were not going to have these series of votes, we would 
keep on going for the rest of the day.
    As previously ordered, members have 14 days to submit 
additional materials for the hearing record. Any member who 
wishes to submit follow-up questions in writing to the 
witnesses should coordinate with the majority staff within 14 
days.
    [Ms. Woolsey includes the following statements for the 
record:]
    [The statement of Mr. Oxford follows:]
    
    
    
    
    
    
    
    
    
    
    
    
                                ------                                

    [The statement of Ms. Reyes follows:]

  Prepared Statement of Laura Reyes, President-Elect, United Domestic 
                      Workers of America (AFSCME)

    My name is Laura Reyes. I am a home care provider and the 
President-elect of the United Domestic Workers of America (UDWA). My 
union and I appreciate the opportunity to submit testimony for the 
record. Since 1979, UDWA has been the pioneer union representing 
domestic workers, home attendants and in-home care workers. UDWA is 
affiliated with the National Union of Hospital and Health Care 
Employees, of the American Federation of State, County and Municipal 
Employees (AFSCME) and is proud to represent 50,000 home health care 
workers who work through the county based In-Home Supportive Services 
(IHSS) public authorities or Addus HealthCare, Inc., in California. 
UDWA was inspired by Cesar E. Chavez, who recruited and trained our 
founding leaders and planted in them the seed to build the domestic 
workers movement.
    UDWA supports H.R. 3582, the Fair Home Health Care Act, which would 
ensure that home health care workers have the basic wage and hour 
protections under the national Fair Labor Standards Act.
    The home care providers represented by UDWA assist individuals who 
have disabilities with mobility, personal hygiene, transportation, 
cleaning and cooking, allowing them the independence to live at home 
with dignity and remain active community members. The unique emotional 
connection required, intense physical and personal nature of the work, 
and potential hazards of the work, make it very challenging, often 
draining and rewarding. For many elderly recipients of home care 
services, we are the only person they see regularly beside their 
physician. Because home care providers with UDWA are dedicated 
professionals and committed to the people we serve, we keenly 
understand the link between providing workers with living wages, 
benefits and training, which leads to a stable and well-trained 
workforce, and the delivery of quality services that truly satisfy our 
client customers' needs.
    It is fundamentally wrong, unfair and unacceptable that the current 
law, as held by the Supreme Court, does not provide home care workers 
with the basic protections afforded to all hourly workers under the 
Federal Fair Labor Standards Act. Wages for home care workers are low 
and keep families near poverty. Two out of five home care workers 
employed by a home care agency lack health insurance. Due to the high 
injury rates, home care workers are especially vulnerable without 
adequate insurance coverage.
    The U.S. Department of Labor projects that at least another third 
of a million new home health aides will be needed by 2014 to meet the 
home health care needs of an aging population that is expected to more 
than double, from 13 million in 2000 to 27 million in 2050. By 
providing home care workers with basic wage and hour protections, H.R. 
3582 would help to reduce turnover and begin to address chronic 
provider shortages.
    The failure to provide minimum wage and hour standards for home 
care workers puts the individuals who need their services at risk. 
Since a client's quality of life and safety may depend on the 
reliability and the skill of the home care worker, access to quality 
services depends on a stable and committed workforce. Low wages, long 
hours and no benefits will continue to deprive individuals with 
disabilities of access to needed services because these conditions 
drive more workers out of these important jobs at a time when the need 
for home care providers is expected to dramatically increase.
    Improving wages and benefits of workers has been shown to 
substantially reduce turnover and improve clients' access to reliable 
and quality services that enable them to remain independent and in 
their homes. An evaluation of the aggregate impact of collective 
bargaining and changes in local wage statutes found that improving 
wages and benefits resulted in a 54 percent increase in the number of 
home care workers and reduced annual turnover by 30 percent.
    H.R. 3582, by providing home health care workers with the national 
minimum wage and hour protections, is an important step in improving 
the recruitment and retention of a reliable and skilled home care 
workforce but more must be done. UDWA urges Congress to improve funding 
for home care services, and to expand affordable access to health care. 
In America no one should be without health care, especially home health 
care workers.
                                 ______
                                 
    Without objection, this hearing is adjourned. Thank you.
    [Whereupon, at 11:09 a.m., the subcommittee was adjourned.]