Did you know that homecare employers will soon have to pay overtime? Are you ready for this?
Two dates to remember:
1.The overtime rule will take effect on October 13,
2. The Department of Labor will begin enforcement on November 12.
This means 5 weeks for homecare agencies to prepare for the change. I can help you get ready for this big change across your industry.
- Do you understand what the overtime rule means for your business? I work with many homecare agencies like yours on compliance issues. Together with the Agency director, we work on developing solutions that make sense for their business while complying with the legislation.
- Do you need guidance to help implement this new regulation without disrupting the care you provide? I understand your business. Homecare is THE people business. Your personal relationships with care workers and care receipients are essential to your Agency’s success. You know what you want to achieve. You’re just not sure it is legal. I can help!
The new requirements – Homecare employers can no longer claim the overtime exemption for their care givers and the pay must meet the minimum wage requirements for their jurisdiction.
Minimum wage is not really the problem. According to the Bureau of Labor Statics, the average hourly pay rate of caregivers is $10.77. When compared to the federal minimum wage of $7.25, most caregivers already satisfy meet this requirement. Note you’re your state may have higher minimums. For example, Washington D.C. has the highest minimum wage at $10.50. 29 states have set their minimum at a higher rate so be sure to check what it is in your locality.
Overtime pay is the kicker. As you know, hours worked over 40 a week will be paid at 1.5 times the regular rate of pay. Homecare agencies are concerned about the potential for increased cost of care and their profit margins.
To prepare for the implementation of overtime in your business, you need to ask yourself a few questions:
- How do we count hours worked by the care workers? This includes time when an employee is not scheduled to work but stays on duty to ensure continuity of care and protection. A short rest break of less than 20 minutes is considered hours worked. However, when the care worker is completely relieved from duty and can run personal errands, this is not work time.
- How many of my care workers currently work part-time? By extending hours to 40 hours a week to part-time workers, home care agencies will avoid overtime pay. Most care workers work part-time in several agencies. They might welcome the opportunity for more hours with one employer and fewer clients. This is your best a pool of potential labor. You know those care workers.
- How many care workers do more than 40 hours a week? Nationally, 9% of home care workers more than 40 hours a week. So the cost of this new rule might not be as high as some agencies fear.
- What’s the applicable overtime rate? Care givers get paid different rates for different clients. You will need to compute a blended pay rate.
- Consider the implications of the Affordable Care Act (ACA). If the full-time equivalent (FTE) of your employees reaches the 50-employee threshold, your business becomes subject to the ACA. Agencies with fewer than 50 employees (caregivers and office staff) need to weigh the cost of paying overtime versus the cost of implementing the ACA.
- Do you have live-in care workers? They become suggest to minimum wage and overtime pay too. However, up to 8 hours of sleep time can be excluded from hours worked and unpaid. However, there are new recordkeeping requirements to track the actual hours worked by the live-in care workers.
Other considerations:
- Have you thought about your communication strategy with your clients and their families?
- How do you compensate for travel between clients? Some innovative approaches can be put in place to less your administrative burden.
- Can care workers be paid a flat rate per visit?
I know you have many questions about hours and pay for your care workers. Call me today and let’s talk about how to implement the overtime rules for your Agency.
