On Wednesday the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies conducted a hearing to discuss the Department of Labor’s fiscal year 2013 budget request. The $3.8 trillion proposed budget would distribute $12 billion in discretionary funds to the DOL, an amount slightly below last year’s funding level. The proposal would, however, provide additional funds to various DOL sub-agencies to boost a number of DOL programs, including $14 million to the Wage and Hour Division (WHD) to combat worker misclassification; $6.4 million to the WHD to bolster its enforcement of the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA), particularly in the area of overtime violations; and an additional $5 million to the Occupational Safety and Health Administration (OSHA) for enforcement of the 21 whistleblower statutes over which OSHA has jurisdiction.

During the hearing, Labor Secretary Hilda Solis answered a number of questions regarding the WHD’s controversial proposed rule that would subject many home care workers to the FLSA’s minimum wage and overtime requirements. Specifically, this proposal would revise the FLSA’s companionship and live-in worker regulations to limit the types of duties that render a home caregiver exempt from FLSA requirements, clarify the type of activities and duties that may be considered “incidental” to the provision of companionship services, amend the recordkeeping requirements for live-in domestic workers, and specify that the exemption is limited to caregivers employed by the individual, family or household using the services only.

Sen. Lamar Alexander (R-TN) expressed a number of concerns about this rule. In particular, he believed that by changing the way overtime is considered, the rule would make the use of home care workers prohibitively expensive for the elderly, thereby forcing “a large number of people now cared for in homes into more expensive institutional settings.” This, in turn, would drive up the cost of health care in states, Alexander claimed. As a result, there would also be fewer jobs available for home care workers. He argued that the DOL has not considered the full impact of the rule. He asked Solis whether the DOL will conduct a more thorough economic analysis of the rule’s impact and consult with state Medicaid directors before pursuing this rulemaking.

While Solis did not say whether a more involved economic analysis would be forthcoming, she did say she would be willing to meet with a Medicaid director. In addition, she responded that the nature of home care work has changed since the FLSA’s companionship exemption was crafted, and that the level of professionalism for this line of work has greatly increased over time.

Subcommittee Chairman Tom Harkin (D-IA) agreed with Solis, stating that as times have changed, we have learned that “it would be cheaper for society as a whole for the elderly to be taken care of in their homes.” According to Harkin, “the answer is not to say we need a whole bastion of home care workers who are paid subminimum wages to take care of the elderly.” He claimed that 16 states currently require minimum wage for home care workers, and that this is a move in the right direction.

Harkin also noted that lawmakers had tried to include the Community Living Assistance Services and Supports (CLASS) Act into the Affordable Care Act, a measure that would have created a national, voluntary program for individuals to purchase long-term care benefits in the event they become functionally disabled. Because the program in its current form would not have been financially sustainable, U.S. Secretary of Health and Human Services Kathleen Sebelius announced in October 2011 that the agency would not pursue its implementation. Earlier this year, the House of Representatives voted to repeal the CLASS Act entirely.

According to Harkin, the only problem with the CLASS Act is that it is voluntary. He claimed that the Act or one like it needs to be mandatory so that there is some source of revenue to make sure the elderly “can get that kind of home care if they so desire.”

A few other Senators brought up the DOL’s H-2B visa rule, which changes certain certification and employer requirements for temporary, seasonal workers. Among other changes, this rule requires businesses employing H-2B workers and/or workers in corresponding employment “to guarantee to offer employment for a total number of work hours equal to at least three-fourths of the workdays in every 12-week period (or, for job orders less than 120 days, every 6-week period).” In addition, the rule requires employers to pay the same transportation and subsistence costs for employees who perform similar work to those hired under the program. Ranking member Sen. Richard Shelby (R-AL) said that many employers in his state rely on the H-2B visa program to find such workers, and that many small businesses cannot afford the costs and burdens of these regulations. Solis countered that the goal of the rule is to promote the recruitment of American workers and minimize visa abuses.

More information on this hearing, including a link to the archived webcast, can be found here.