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Racial Wealth Divide

Homecare Ruling a Historic Victory

Research & Commentary
August 27, 2015

by Betsy Wood

Last week’s court decision combats longstanding racism and sexism embedded in U.S labor law.

On Friday, a federal appeals court upheld a Department of Labor rule requiring homecare agencies to pay the federal minimum wage and overtime.

Two million homecare workers—90 percent of them women and 53 percent women of color—will be affected by the new rule.

Homecare workers—home health aides that care for the elderly and disabled—were among the last domestic workers not to have basic labor protections in the U.S. Along with agricultural workers, all domestic workers (those who worked in private homes) were excluded from the Fair Labor Standards Act in 1938.

Anyone want to guess why?

Back in 1938 FDR needed the support of Southern legislators to get his New Deal passed. And the only way they’d support Roosevelt’s legislation was if certain exceptions were made to preserve the Southern way of life.

That, of course, meant preserving cheap African-American labor both in the fields and the homes of white families where black women toiled.

The Fair Labor Standards Act was a devil’s deal. It was historic on many levels and remains the foundation of basic labor protections in the U.S. But it was built on exclusions. The legacy of those exclusions is, sadly, still with us and continues to drive economic inequality today.

Last week’s court ruling marks the end of a long struggle to extend FLSA protections. In 1974, the FLSA was amended to include domestic workers (nannies, housekeepers, cooks, gardeners, and others) but a loophole was created for those who provide “companionship” for the disabled or elderly.

Since then, the “companionship exemption” has meant that employers of homecare workers who care for the elderly or disabled could claim the exemption to avoid paying overtime and minimum wage. And in recent years, large corporate employers have been profiting handsomely from this exemption.

At stake in last week’s decision was whether the DOL had the authority to narrow the definition of “companionship” to make it more in line with actual companionship—such as engaging in conversation, going on walks, or running errands.

But home health care services that require training—which covers practically all homecare workers—can no longer be claimed under the exemption.

Domestic workers and their allies organized for years to see this day, and they have won. It’s a victory for women and racial minorities, the elderly and disabled who need quality care, and everyone fighting to end extreme inequality.

Gender and race-based exemptions were baked into the legal regime that ended America’s first Gilded Age. As we confront rising inequality in our own second Gilded Age, we must focus on correcting the racial and gender inequities left in the wake of the first.

In this fight, domestic workers are leading the way.

Dr. Marjorie Wood is the managing editor of, a senior staff member at the Institute for Policy Studies, and an award-winning U.S. labor historian.

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