Proposal to Remove Federal Wage Protections Threatens Home Care Workforce

A federal proposal would reverse a decade-old policy that brought many in-home caregivers under the Fair Labor Standards Act, removing guaranteed federal minimum wage and overtime protections for millions. Officials advocating the change argue the earlier policy produced unintended effects: agencies capped hours to avoid overtime costs, workers fragmented schedules across employers, and families and Medicaid programs faced higher bills. Opponents say stripping those protections will deepen workforce instability in a sector already marked by low pay, high attrition and heavy reliance on public supports. The caregivers affected are disproportionately women and people of color, and many rely on public assistance; rescinding protections would therefore carry distributional consequences beyond wages. Enforcement under the previous rule generated measurable recoveries for workers, as agencies paid roughly $158 million in back wages after compliance actions; eliminating coverage would reduce that enforcement pathway. States with their own domestic worker protections, such as New York, would blunt some impacts, but most jurisdictions would see an immediate erosion of federal standards. The administration frames this as an affordability correction for families and Medicaid budgets, but analysts warn that lower pay and fewer protections will make recruitment and retention harder just as demand is set to surge. Projections show substantial workforce growth needs in the coming decade, so policy choices now have ripple effects for long-term capacity. Litigation and regulatory uncertainty have already complicated employer behavior; a formal rescission would shift the legal and compliance landscape again, prompting state-level policy responses and new advocacy campaigns. The decision pits short-run cost containment against labor market quality, public health access and the durability of long-term care infrastructure. Without parallel investments—higher Medicaid rates, direct subsidies for families, or wage-support programs—the rollback risks translating into reduced hours of care, more fragmented provider relationships and greater reliance on institutional alternatives. For policymakers, the immediate fiscal relief this action might offer will be weighed against likely increases in turnover, recruitment costs and potential declines in home-based care availability. The debate crystallizes a broader question about how the nation values and finances hands-on long-term care for an aging population. Ultimately, the regulatory change would reallocate risk between workers, families and state programs rather than resolve the sector’s underlying funding shortfall.