The US Department of Labor web site shows that effective January 1, 2015, all home care companies will need to pay overtime for personal care aides, home health aides, and certified nursing assistants who work more than 40 hours per week. Fact Sheet #25 issued by DOL specifically for Home Health Care gives details of the old rule which is in effect until January 1, 2015. It then takes you to a Fact Sheet outlining the new Rule.
What are People Saying?
"Today's home care workers are lumped into the same category as teenage baby sitters when it comes to how much they make. This is wrong and unfair. Receiving a fair wage will further stabilize and professionalize a critical line of work that is suffering from a shortage of workers."
Secretary of Labor
"Businesses will have trouble because customers won't be able to afford the care. In the end, the people who will be likely to suffer will be the workers who can't get the work they had before."
Executive Director for Labor Law Policy
U.S. Chamber of Commerce
"While intended to help caregivers, this rule will have the opposite effect. Home care companies will have little choice but to employ workers part-time rather than full-time as Medicaid payment rates and consumers with limited incomes cannot afford higher costs. Caregivers in the end will receive less pay."
National Association for Home Care and Hospice
"The move will benefit the largely female, minority, and low-wage workers who provide these essential services."
"The Obama administration has made good on its promise to extend wage and overtime benefits to home care worker. It is important that agencies and states not make shortsighted changes to their programs that could reduce benefits or deprive consumer of the consistency of care they receive from their providers."
Mary Kay Henry
Service Employees International Union
The Final Regulation - all 358 pages - may be downloaded from the Labor Department's Web site.
What Does This Mean to YOU?
Owners of home care companies will be hit with a double whammy on January 1, 2015. First, you will need to pay overtime to your caregivers for more than 40 hours of work. Second, you will need to either purchase health care insurance for your caregivers or pay a penalty to the government under the provisions of the Patient Protection and Affordable Care Act.
In our view, these two new laws will have the following effects:
- Caregivers will make less money because they will not be able to work more than 40 hours for one employer
- More caregivers will have to work two jobs so they can work more than 40 hours
- Clients and families will have to pay more for home care services
- Home care companies will see increased costs of doing business. These include:
- Paying overtime
- Paying minimum wage and overtime for live-in caregivers
- Paying for health insurance or paying the penalty
- The increased cost of recruiting, selection, training, and retention of caregivers.
However, be assured that it's not the end of the world. A number of states already have laws which override the companionship exemption, and Massachusetts has required health insurance for several year. Home Care companies are resilient, and have managed to survive and prosper in those states. However, the hourly rates charged to clients are higher in those states than in other states.
We'll watch these developments closely and keep you informed on the best practices in the industry as you adapt to change.