For more than two decades, Denise Lugo has worked as a home care worker in Fayetteville, North Carolina, caring for elderly clients in their homes.
Workers like Lugo provide intimate care for seniors and people with disabilities who cannot care for themselves. For what’s often grueling work, Lugo makes $15 an hour caring for two clients, juggling everything from light housekeeping to household errands to bathing, dressing and exercising.
But Lugo’s livelihood and that of 3 million home care workers across the country is now in peril under a proposal by the Trump administration to end their rights to federal minimum wage and overtime.
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The move to reopen the companionship loophole was a handout to big corporations, the home care agencies, which are a powerful industry with a lot of private equity investment.
Workers like Lugo have been mobilizing against the Trump administration proposal, which reopens a loophole allowing employers to broadly classify care workers as “companions” who can be paid less than minimum wage and are not eligible for overtime pay. The fight has also energized workers’ efforts to push state and federal lawmakers to strengthen their rights even as federal ones are taken away.
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The change, part of a suite of 63 deregulatory actions by the U.S. Department of Labor, is already effectively being implemented, said Mimi Whittaker, a legal fellow at the National Employment Law Project. Rulemaking is still in process, but leadership at the Department of Labor’s Wage and Hour Division instructed staff in July to immediately refrain from investigating home care agencies that had been charged with misclassifying workers as companions, and to drop any cases currently being considered.
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Home care employers, particularly for-profit agencies, often exploited a “companionship” loophole that existed from 1974 to 2015, said Eileen Appelbaum, co-director of the Center for Economic and Policy Research. In 1974, the Labor Department extended wage and overtime protections to care workers unless they were “companions.” In 2013, regulators restricted the companionship definition and closed the loophole as of 2015.
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The move to reopen the companionship loophole was “a handout to big corporations, the home care agencies, [which are a] powerful industry [with] a lot of private equity investment,” said Whittaker. The majority of home care agencies are for-profit, and an increasing share of them are run by private equity groups.
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