2015 12 02 OT implementation for caregiversCaregivers in the home care industry are now eligible for overtime pay when they work more than 40 hours a week. This change in the Wage & Hour rules came into effect on October 13th and the Department of Labor (DOL) is ramping up enforcement in these early days of the new rule.

My last blog post examined the implementation of overtime pay from the business perspective of owners in the home care industry. This week, let’s consider what the change means for the caregivers. Although changes are afoot, they are not translating in larger pay checks for most caregivers.

Sharing the news

In South Carolina, the owner of a private duty agency reported that the announcement about overtime pay was received as good news by caregivers. Although few do get to work overtime hours, the possibility of additional income is seeing as a plus. “We had an emergency night shift to cover that night. Caregivers were in a good mood and many volunteered to help out.”

However, most agencies have decided to adapt their business model and limit their caregivers to 40 hours a week unless a client is willing to pay the additional cost of overtime hours. “It’s actually putting a limitation on the earning potential of caregivers,” commented a representative of a Visiting Angels franchise in Virginia. ”Our caregivers work hard and many have tough lives. The new rule makes it more difficult for them to make ends meet.”

Tracking work hours

Another major change brought on by the overtime pay rule is the need to track the hours worked by caregivers. The model of a flat fee for service is no longer viable. All hours worked have to be recorded and paid at regular rate of pay until 40 and at time and half beyond 40.

But what counts as work hours? Caregivers need to be paid for the time spent with a client; the time spent travelling from one client to another during the workday, the time sent doing in-service training and attending mandatory meetings.

How to track hours worked? Most agencies have a phone-in system with GPS already in place. This allows providers to track the attendance of their employees. It now doubles up as a time system. This is particularly helpful when the time and attendance software “speaks” to the payroll system.

Agencies without technology have to introduce time cards and train caregivers on how to accurate and properly fill in a time card. It might also be time to consider investing software to eventually replace the paper and pen approach of time cards.

Paid travel time is new for many caregivers. But how to discourage abusive claims of long commute times between clients? Trust your scheduling system. Most have a feature that will calculate the travel time from one location to the next client’s. However, caregivers are not eligible for paid commute time to and from home such as in the case of split shifts.

Other changes for Caregivers

Announcing the change in pay practice is only one of the changes. The employee handbook needs to be updated to reflect the changing practices in pay.

A new aspect for many caregivers is the requirement to get permission to work overtime. Providers have to be clear on who is able to authorize overtime work and how certain emergency situations creating overtime work need to be handled by their office staff and caregivers.

And What About the ACA?

The next shoe to drop for many home care providers is the implementation of the Affordable Care Act (ACA). The law requires employers with more than 50 full-time workers to offer health insurance or face financial penalties. Many caregivers might not be able to afford the coverage offered by their employers. When the providers have decided to pay the penalty rather than offer insurance, the caregivers will be able to have access to the Marketplace and might qualify for subsidies.

In Conclusion

Although more legal challenges to the overtime rule are making their way to the Supreme Court, the home care providers (see previous article) and caregivers are adjusting to the new world of overtime pay. However, caregivers may not gain much additional pay from it.

If you are wondering how to implement overtime in your home care agency or need help updating your employee handbook, contact me for a free consultation at 757-303-1635.