Ask the Experts: Summary of the GAO Report: Observations on the Effects of the Home Care Rule

Through a partnership with Littler Mendelson P.C Labor & Employment Law Solutions, we are excited to share the “Ask the Experts” Article. Each week, we will feature a new question, from you our members, related to workplace issues and topics that will be answered from our experts and partners at Littler.

This week, our experts at Littler share a summary with us of the recent GAO report and the observations on the effects of the home care rule.

Thank you to our expert authors Angelo Spinola, Will Vail, and Elizabeth Barrera.

Summary of the GAO Report:
Observations on the Effects of the Home Care Rule

In 2013, the U.S. Department of Labor (DOL) revised its regulations on domestic service employment and companionship services under the Fair Labor Standards Act (FLSA).  The final rule, known as the Home Care Rule, extended minimum wage and overtime protections to most non-medical home care workers.  The DOL anticipated that the new rule would increase wages for caregivers by providing for overtime wages, reduce worker turnover and result in higher quality of care being delivered to the consumers of home care services.  After protracted litigation, the Home Care Rule became effective in November 2015.  

Several Members of Congress requested the Government Accountability Office (GAO) to examine the impact (if any) the Home Care Rule has had on workers and consumers of home care services.  The GAO interviewed 15 national-level organizations and analyzed national survey data on workers and consumers.  It also observed the impact of the COVID-19 pandemic on home care workers and the consumers of home care services.  On October 19, 2020, the GAO issued its report.  

Ultimately, the GOA found that the Home Care Rule has not increased caregiver wages and in some cases has resulted in consumers of home care services receiving fewer services.  For example, some states changed their Medicaid programs to limit home care workers’ hours to avoid overtime costs.  Some provider agencies discontinued programs that provided 24-hour or live-in care, as well as respite care.  These changes have caused additional stress on family caregivers.  Restricting work hours also has led to increased costs for recruitment, training, scheduling, and recordkeeping activities, such as tracking overtime hours and time spent traveling between clients.  

Little Positive Impact on Workers

Below is a summary of the GAO’s findings of the impact of the Home Care Rule on home care workers:

  • Home care workers saw a slight increase in the average number of hours typically worked (33 hours per week in 2010 to 34 hours in 2019).
  • There was an increase in the proportion of home care workers who reported working full-time hours (defined as 35+ hours per week) (49% in 2019 versus 38% in 2010).
  • Home care workers’ weekly pay did not meaningfully increase relative to workers with similar occupations ($352 per week in 2010 versus $400 in 2019, as compared to other industries: $347 per week in 2010 and $390 in 2019).
  • The number of home care workers working overtime did not change after implementation of the Home Care Rule (about 10%), but the number of overtime hours a home care worker worked did decrease following implementation (20 hours in 2010 to 17 hours in 2019).
  • Part-time home care workers may have benefited from hours redistributions. 
  • Home care workers are more likely to work for multiple consumers or third-party employers to maintain their pre-Home Care Rule hours (about 7% work for multiple employers).  Note, there was no change in the proportion of home care workers working for multiple employers following implementation.

Tremendous Negative Impact on Consumers

For consumers, the GAO found the Home Care Rule exacerbated the challenges in finding and hiring home care workers.  Where states or provider agencies have added hour restrictions to avoid incurring overtime costs, some consumers have hired additional workers to ensure their needs are covered.  In other instances, family or informal caregivers fill the gap.  And in still other situations, their needs go unmet.  Needless to say, continuity of care has been negatively impacted.  But, interestingly, the GAO found that there was an actual decrease in the number of individuals living in institutions from before to after the Home Care Rule was implemented.  

Final Observation

One final note, as the U.S. population ages and the demand grows for home care workers, employment in the industry is expected to increase nearly 40 percent in the next decade.  But even now, many home care organizations face continuing difficulty in finding workers.  The GAO report seems to make clear that the Home Care Rules limitations will have a negative impact on the ability of consumers to find the quality and quantity of caregivers needed.

 1. 52% of workers in occupations with similar entry requirements reported usually working full-time, an increase of 6% from 2010.  These similar occupations are: food preparation workers; combined food preparation and servicing workers, including fast food; waiters and waitresses; janitors and cleaners, except maids and housekeeping cleaners; maids and housekeeping cleaners; cashiers; retail salespersons; and stock clerks and order fillers.

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