By Bruce B. Deadman
On September 17, 2013, the U.S. Department of Labor (DOL) announced a final rule extending Fair Labor Standards Act (FLSA) minimum wage and overtime protections to nearly two million workers who provide home care assistance to the elderly, ill and disabled. The rule takes effect January 1, 2015.
In announcing the rule, Secretary of Labor Thomas E. Perez stated, “Today we are taking an important step toward guaranteeing that these professionals receive the wage protections they deserve.”
Critics, on the other hand, believe that the new rule will harm many who need in-home care because they and their families will no longer be able to afford it. For example, many home health aides provide live-in services, and overnight and weekend hours could result in substantial amounts of overtime pay for their services. The Society of Human Resource Management (SHRM) reported that, according to Andy Carter, president and CEO of the Visiting Nurse Association of American, a trade group, “Since Medicare and Medicaid payments do not allow for overtime, multiple caregivers will need to be assigned to care for patients that have extended needs.”
There is also concern in some quarters that those in need of care and their families may reject care altogether, or may hire untrained, unqualified personnel who will provide inadequate services.
What is the impact of this new rule on the average person seeking home health care services? First, anyone, including an individual needing care or their family who employs a home health care aide will be required to keep basic employee time and pay records, including the hours each employee works each week. Second, those employees must be paid at least minimum wage, which is currently $7.25 per hour, plus overtime at one and one half times their hourly rate for hours worked over 40 in a week.
Also, anyone who directly engages the services of a home health care worker without going through a third party agency should also be aware that under current law there may already be liability for the worker’s unemployment compensation. There could also be liability for the worker’s medical bills and other benefits under workers’ compensation law in the event of an on the job injury.
If you have directly hired home care health workers, without a third party involved, now is a good opportunity to conduct a self-audit to determine whether you will have increased costs when the rule goes into effect, and if you should already be treating such workers as employees. On the other hand, if you have hired home-care workers through an outside service, the agreement with the providing agency should clearly acknowledge the workers are the agency’s employees, are responsible for complying with the wage regulations, and indemnify the user of the agency.
To reference the DOL’s assembled information and compliance assistance materials, please visit their website at: http://www.dol.gov/whd/homecare/.
If you have any questions about this information or require legal assistance, please contact your Davis & Kuelthau attorney or the author, Bruce Deadman, at 920.431.2228 / bdeadman@dkattorneys.com.