Submitted via regulations.gov
Daniel Navarrete
Division of Regulations, Legislation, and Wage and Hour Division,
U.S. Department of Labor
Room S-3502
200 Constitution Avenue NW
Washington, D.C. 20210
Comments on RIN 1235-AA51: Application of the Fair Labor Standards Act to Domestic Service.
Dear Mr. Navarrete:
The Economic Policy Institute (EPI) submits this comment to strongly oppose the Department of Labor’s Notice of Proposed Rulemaking Application of the Fair Labor Standards Act to Domestic Service. We strongly oppose stripping basic wage and hour protections, which should be the fundamental right of every worker, away from one of the most critical sectors of the U.S. workforce. We urge the Department of Labor (DOL) to instead support the agency’s proposed alternative that would preserve the existing regulations that provide for a minimum hourly wage (currently $7.25 at the federal level) and overtime protections for the millions of workers that provide care and services in the home.
The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers, and assesses policies with respect to how well they further those goals.
For years, EPI has conducted research on the low-wage workforce, including on domestic workers and the home care workforce specifically. EPI research and those from other trusted sources have repeatedly found that, despite the invaluable nature of their work, most home care workers face low pay, rarely receive benefits, and have less access to full-time work than other workers. Because they work in private homes, they are outside of public view and isolated from other workers, leaving them particularly vulnerable to exploitation.1
Overturning Fair Labor Standards Act (FLSA) protections for these workers would represent a massive blow to low-wage workers, and to women and people of color in particular, who are heavily overrepresented in this industry, as we discuss further below. Caregiving work can be meaningful and rewarding, but it is also often physically, mentally, and emotionally demanding work. Home care workers work with elders, people with disabilities, people recovering from illness or medical procedures, and assist with intimate day-to-day including administering medication, monitoring health vitals, bathing, preparing meals, providing transportation, and engaging in activities. This provides essential caregiving support to both clients and their families. As the U.S. population ages, and more and more people, both seniors and people with disabilities, prefer to receive care in their homes and integrated community settings rather than in institutional settings such as nursing homes or group homes, we should support, not undermine, the home care workforce as they help to meet these needs.
Many groups of domestic workers were originally excluded from the FLSA. This policy decision explicitly left domestic and agricultural workforces–which, at the time of enactment in the New-Deal era, were majority-Black–without the basic minimum wage and protections being extended to other workers. As the NPRM notes, Congress extended FLSA protections to some groups of domestic workers in 1974, including those who were employed directly by a member of a household to perform tasks. But the 1974 changes to the bill also established the vague and overused “companionship exemption.” Over time, employers have applied the companionship exemption far wider than its original intent. We argue that the companionship exemption was never meant to say that workers providing caregiving services for pay through third-party employers, such as through home health care staffing agencies, should not receive at least the minimum wage. The current NPRM seeks to rescind the Department’s 2013 home care regulation (2013 final rule) that narrowed this exemption. In these comments, we discuss how the Department’s economic impact analysis for this NPRM is incomplete, methodologically flawed, and internally inconsistent.
The Department’s NPRM contains inadequate economic analysis and understates the economic costs of this regulation that would be borne by home care workers.
The regulatory impact analysis (RIA) in the NPRM is fundamentally incomplete. It significantly understates the complexity and scope of impacts arising from this proposed rule. It (1) fails to quantify key transfers, (2) overlooks distributional harms, and (3) makes unsupported claims of benefits and downplays costs and transfers. This RIA cannot support informed decision-making or a rational comparison of regulatory alternatives.
Failure to quantify key impacts
The RIA is less than 5 pages long and provides no dollar impacts—no estimated regulatory familiarization costs; no estimated changes in hiring costs; no estimated transfers from workers to employers as a result of loss of minimum wage protections, overtime protections, or compensation for travel time; no estimated impacts of changes in the rate of turnover; no estimates of employment impacts; nothing. The analysis is entirely speculative. By contrast, the RIA in the 2013 final rule2—which this proposal would rescind—included all of these estimates and more. Omitting them here is a flagrant violation of the Administrative Procedures Act requirement to assess reasonably quantifiable impacts.
Overlooks distributional harms
The Department acknowledges that rescinding the 2013 rule will transfer income from workers to employers and consumers, yet it fails to provide even a range of those transfers, or to acknowledge the distributional harms that will result. These harms are not abstract: home care workers are among the lowest-paid workers in the U.S. economy, and shifting income away from them will directly harm them and increase inequality.
In 2022, EPI produced a chartbook with detailed information about the demographics, wages, benefits, and poverty rates of several domestic worker occupations, including home care workers.3 The chartbook uses the same definition of home care workers used in the Government Accountability Office (GAO) study cited by the Department in the NPRM.4 As detailed below, the demographic profile of home care workers is different from that of workers as a whole, with home care workers disproportionately likely to come from demographic groups—like women and people of color—that have lower average earnings due to the impact of broad structural biases on labor market outcomes. But the EPI chartbook shows that even after controlling for gender, nativity, race/ethnicity, educational attainment, age, marital status, and geography, agency-based home care workers have an hourly wage that is 25.6% less than other similar workers, and non-agency-based home care workers have an hourly wage that is 31.3% less than other similar workers. Annual earnings gaps are even larger—42.8% and 58.3%, respectively.
Home care workers are also much less likely to have workplace benefits than other similar workers: after applying the same set of controls listed above, agency-based home care workers are 17.1 percentage points less likely to have employer-provided health insurance and 14.1 percentage points less likely to have an employer-provided retirement plan than other similar workers. Similarly, non-agency-based home care workers are 24.9 percentage points less likely to have employer-provided health insurance and 20.6 percentage points less likely to have an employer-provided retirement plan.
Finally, home care workers are much more likely than similar workers to live below the poverty line or below twice the poverty line—the latter being what researchers often use as a measure of what it takes to make ends meet. Again after applying the same set of controls, agency-based home care workers are 7.0 percentage points more likely to live in poverty than other similar workers, and 19.9 percentage points more likely to live below twice the poverty line. Non-agency-based home care workers are 7.1 percentage points more likely to live in poverty than other similar workers, and 13.6 percentage points more likely to live below twice the poverty line.
Using the same definition of home care workers, we have done related calculations using updated data (pooled 2022-2024 data).5 We found that 85.0% of home care workers are women, 63.3% are people of color, 32.6% are immigrants, 85.7% do not have a college degree, 28.4% are custodial parents of at least one child under 18, and only 8.6% are represented by a union. The median home care worker earns $16.57 per hour, which is less than $35,000 per year for a full-time, full-year worker and on par with the 20th percentile of the overall wage distribution.6 Taking away minimum wage and overtime protections from such a vulnerable group virtually guarantees a regressive transfer of income.
Unsupported claims of benefits and downplaying costs and transfers
The main benefit the Department cites for the recission of the 2013 rule is that, by lowering labor costs, it will expand access to health care services by encouraging more providers to enter or grow in the home care market. This claim is absurd, as it ignores the fact that there is a severe shortage of home care workers. This fact is very explicitly detailed elsewhere in the NPRM, which notes, for example, that “the supply of home care workers is failing to keep pace with the growing demand for home care services” and cites a 2023 industry report that “the workforce shortage in home-based care has reached crisis proportions,” with “home health care providers [reporting that they turn] away over 25% of referred patients due to staff shortages.”7
With providers already forced to reject patients because of too few workers, there is no meaningful room for expansion given the current supply of workers. Lowering wages will not expand labor supply. Virtually the only way to draw more workers into the profession is to improve these jobs. Stripping away protections that boost pay will make recruitment harder, not easier, and will worsen the problem of insufficient access to home care services. Interestingly, the NPRM does acknowledge that the rule could “lead to increased employee turnover and difficulty attracting skilled workers to the industry.”8 This admission directly contradicts the Department’s central claim that rescission will expand access to home care services, underscoring the internal inconsistency of the analysis.
It is worth noting that a worsening home care worker shortage does not mean, as the NPRM suggests, that the 2013 final rule failed to attract workers to the industry. The NPRM states:
And although the Department predicted in 2013 that ‘‘guarantee[ing] minimum wage and overtime compensation for home care jobs . . . will attract more workers to the home care industry,’’ growth in the home care workforce ‘‘slowed’’ in the years following the 2013 rule, with ‘‘the number of home care workers per100 [individuals receiving home and community-based services] declin[ing] by 11.6 percent between 2013 and 2019.
First, the number of home care workers per 100 individuals receiving home care is a deeply flawed measure to use as evidence that the 2013 rule didn’t attract workers. That ratio depends not only on workforce growth, but also on growth in the number of people needing care—a factor driven by external forces like demographic shifts, not by labor supply. In fact, the number of individuals receiving care grew by more than 25% between 2013 and 2019, according to the study the department cited.9 If instead that population had grown at roughly the same pace as the overall nonfarm payroll workforce—1.7% annually on average—the ratio would have meaningfully increased.
However, the report the Department cited in that passage does indeed show that the home care workforce grew more slowly from 2013–2019 than from 2008–2013.10 But it is crucial to recognize the vastly different macroeconomic conditions in those two periods. The first period, 2008–2013, consisted of the Great Recession and a very weak recovery—the unemployment rate reached 10% in 2009 and was still 7.4% on average in 2013. In that environment, workers often had little choice but to take whatever jobs they could get, including the low-paying home health care jobs that were available because demand for home health services was growing.
By contrast, the 2013–2019 period was marked by a steadily strengthening labor market, with the unemployment rate getting below 5% by 2016 and as low as 3.5% in 2019. In this context, workers were far less compelled to take whatever jobs they could find, no matter how low the pay—and, as described above, home health care jobs are among the lowest paid in the economy, even after the 2013 rule. It is therefore unsurprising that growth in home care employment would slow between these two periods. The fact that the Department took the slowdown in growth between two periods—periods that were very different on measures that had nothing to do with the rule—as evidence that the rule didn’t draw people into the profession is an egregious error in economic reasoning.
The Department further claims that “workers who are employed by multiple home care agencies…may be able to consolidate their employment with one agency, thus yielding a convenience-related benefit.” This would apply to at most a very small fraction of home care workers: we find that just 7.4% of home care workers have more than one job. It is also worth noting that the GAO report cited by the Department in the NPRM finds no evidence that the share of home care workers with multiple jobs increased following the rule.11
It is also important to note that the fact that the federal minimum wage is currently set at a historically low level does not imply that rescinding minimum wage protections for home care workers would have little practical effect, as the NPRM suggests. First, workers who become exempt from FLSA coverage as a result of this rescission may be at risk of losing coverage under higher state and local minimum wage laws in any states/localities that don’t have their own home care worker coverage. But perhaps more importantly, although the federal minimum wage has been allowed to erode in real terms, it should not be assumed that this will persist indefinitely. Over time, it is reasonable to expect that the federal minimum wage will be increased, in which case exempting home care workers would prevent them from sharing in those future improvements.
Evidence confirms that, unsurprisingly, minimum wage increases do indeed raise the wages of home care workers. For example, a 2022 study published in the journal Home Health Care Management & Practice found that home health aides’ hourly wages were $1.00 higher in states that increased their minimum wages from below $8 to above $10.12
The Department also discusses that the benefits of the rule will include decreased regulatory compliance burden on home care providers. However, the Department does not provide any meaningful evidence for this assertion. And as the National Domestic Workers’ Alliance has noted, the record-keeping requirements of the FLSA–which include basic timesheets and information on hours worked that are already widely used by all covered employers in the U.S.–are not any more burdensome than compliance with other regulations, such as tax law. Recordkeeping for both employers and for state agencies are critical in public transparency–particularly since so many agencies receive public funds through Medicaid in order to operate.
Finally, the Department’s assumptions that the recission will have limited negative effects relies heavily on the 2020 GAO study mentioned above which concluded that the 2013 final rule was not associated with higher hourly or weekly pay for home care workers relative to other occupations with similar entry requirements. However, the Department ignores more recent research by an Associate Professor at Rutgers University that uses narrower comparison groups that are more similar to the home care workers impacted by the rule and finds that the 2013 rule was indeed associated with higher hourly pay and higher weekly earnings among agency-based home care workers.13
In sum, the Department’s economic impact analysis is incomplete, methodologically flawed, and internally inconsistent. It omits quantifiable impacts that were standard in the 2013 rulemaking, disregards the regressive distributional consequences for a disproportionately vulnerable workforce, and relies on selective evidence. By overstating potential benefits and minimizing costs and transfers, the NPRM fails to provide a sound analytical basis for rescission.
DOL should withdraw this rule and instead focus on strengthening protections and enforcing existing labor rights for home care workers.
Home care occupations are projected to grow at a much faster pace than the rest of the workforce. Home care workers are critical to supporting families and households across the country. To draw workers into this vital industry, it is crucial home care jobs become good jobs that pay family-sustaining wages and that provide dignified protections and working conditions to workers.
For far too long before DOL’s final rule went into effect in 2015, the home care industry was reliant on an exploitative labor model dependent on paying low wages. Taking away basic protections for these workers is a loss for the workers themselves, who will find their pay and benefits slashed even further, and will harm patients and clients who need caregiving services and struggle navigating an industry that has long faced challenges with worker turnover and retention. The home care industry has already adjusted to providing these basic protections, as the rule has been in full effect for a decade. Revoking these protections is legally unwarranted, economically damaging, and unjust. We urge the agency to withdraw the rule as proposed.
Sincerely,
Heidi Shierholz, Ph.D.
Executive Director
Economic Policy Institute
Samantha Sanders
Director of Government Affairs & Advocacy
Economic Policy Institute
1. Laura Dresser, Valuing Care by Valuing Care Workers: The Big Cost of a Worthy Standard and Some Steps Toward It, Roosevelt Institute, October 2015.
2. 78 Fed. Reg. 60497.
3. Asha Banerjee, Katherine deCourcy, Kyle K. Moore, and Julia Wolfe, Domestic Workers Chartbook 2022, Economic Policy Institute, November 2022.
4. Government Accountability Office (GAO), Fair Labor Standards Act: Observations on the Effects of the Home Care Rule, October 2020.
5. Economic Policy Institute, Current Population Survey Extracts, Version 2025.8.8, https://microdata.epi.org. (Pooled 2022-2024 data).
6. The average of the overall 20th percentile wage from 2022-2024 is $16.37. Economic Policy Institute, “Hourly wage percentiles – Real hourly wage (2024$),” State of Working America Data Library, 2025.
7. 90 Fed. Reg 28981.
8. 90 Fed. Reg 28982.
9. Amanda R. Kreider and Rachel M. Werner, “The Home Care Workforce Has Not Kept Pace with Growth in Home and Community-Based Services”, Health Affairs no.5, April 2023. https://doi.org/10.1377/hlthaff.2022.01351.
10. Amanda R. Kreider and Rachel M. Werner, “The Home Care Workforce Has Not Kept Pace with Growth in Home and Community-Based Services”, Health Affairs no.5, April 2023. https://doi.org/10.1377/hlthaff.2022.01351.
11. Government Accountability Office (GAO), Fair Labor Standards Act: Observations on the Effects of the Home Care Rule, October 2020.
12. Di Yan, Helena Temkin-Greener, Ronni Pavan, Hao Yu, and Shubing Cai, “Did Minimum Wage Policy Changes Impact Home Health Workforce?”, Home Health Care Management and Practice no.25, pp. 206-212, December 2022. https://doi.org/10.1177/10848223221140502.
13. Joy Jeounghee Kim, “Extending the FLSA Protection to Home Care Workers: Effects on Workers’ Labor Market Outcomes,” Rutgers University, 2021. https://doi.org/10.7282/00000139.