(Photo: Garry Knight)
The U.S. Department of Labor is proposing to end the overtime exemption of “companions” (home assistants typically employed to assist/watch the infirm elderly) employed by an agency. The exemption would remain for companions employed directly by a private individual. This rule would lead to classic results: 1) Higher labor costs through agencies, no doubt passed onto older people in the form of higher prices, leading to less employment through agencies; 2) A shift to more companions employed directly by individuals.
I’m not sure what the demand elasticity for companions is, but it is unlikely to be small. Moreover, the negative effect on jobs through agencies will be larger than the positive effect through increased direct employment. Also, agencies reduce transaction costs (including background checks, arranging tax payments, etc.), so this change will also raise those costs and reduce well-being. The only winners appear to be the bureaucrats who would have more rules to enforce and those agency companions who keep their jobs. (HT to FH)
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I’m worried about the quality of care that the people that need these aides are going to get. I’m fortunate enough to work for a company that does pay overtime, that also allows us enough time with our patients to be certain they are getting the care they require. Many privately-hired aides are not certified, and aren’t educated in they type of care many of these people require.
That being said, the majority of home health aides out there now, really care about their job, love every person they are taking care of, and deserve to be paid a fair wage for what they do. Its a tough job.
Its hard to put a price on someones quality of life, whether its the person giving the care, or the person receiving it. Lets hope this message doesn’t get too lost on those who are on the never ending hunt to earn that last dollar.