Thanks to new federal regulations regarding compensation for home care workers, next year will bring higher costs to consumers and reduced continuity of care across the home care industry. Unfortunately, individuals receiving live-in home care will be the hardest hit.
The regulations in question are published in the U.S. Department of Labor’s (DOL) Final Rule on the Application of the Fair Labor Standards Act to Domestic Services, effective on January 1, 2015. Among other provisions, the rule extends minimum wage and overtime protection to home care workers, including live-in workers. Although prevailing hourly wages for home care workers are already well above the federal minimum, employers have heretofore usually not paid overtime. With narrow exception, the rule applies not just to third party employers but to individuals who hire privately as well.
In consequence, live-in workers (who are now almost always paid on a per-diem basis) must be paid by the hour, with all hours in excess of 40 per week paid at one and a half times the basic hourly wage. Employers will therefore have to implement procedures to maintain accurate daily records of all hours worked.
The DOL also provides explicit guidance as to what constitutes work. According to the department’s exact wording, “The key issue in determining when workers are performing compensable work is whether they are working or engaged to wait for work or whether they have been completely relieved from duty and are able to use the time for their own purposes….Under the FLSA, an employee who reads a book, knits or works a puzzle while awaiting assignments is working during the period of inactivity. In such cases the employee is ‘engaged to wait’ and must be paid for such time.”
In determining what can legally be considered off duty time, the key criterion is whether the employee is 100% free to constructively use the time for his or her own personal purposes. In practice, off duty time can be considered to be those periods during which the employee could, if desired, leave the home for some meaningful use of the time.
To quote the DOL, employees are considered off duty if they have been “completely relieved from duty and are able to use the time for their own purposes – to go to a movie, run a personal errand, attend a parent-teacher conference…” Employees need not be paid for this time. The DOL rule also allows for the exclusion from pay of bona fide sleep and meal times, as long as not interrupted by a call to duty. However, for most live-in clients, that still leaves about 14 hours of compensable work each day.
As a result of the new rule, the common practice of paying live-in workers a flat rate per day will no longer be permissible. In turn, home care companies can be expected to discontinue per diem charges to clients and substitute hourly charges. Thus, even at today’s Northern Virginia median hourly charge of $20 for a home health aide, a live-in client would be paying $280 per day.
There’s more, however. Most live-in clients are accustomed to having the same aide, who may be relieved no more often than one weekend every two weeks or so. The new rule will require the employer to pay the aide for all time worked in excess of 40 hours in a week. If the aide works for seven days in a row, then he or she must be paid for 98 hours (assuming 14 hours of compensable work per day), of which 58 must be paid at time and a half. Home care agencies will simply be unable to assume this huge additional cost without passing most of it on to consumers.
In reality, therefore, a client who engages a home care agency for live-in care provided by a single primary aide could face daily costs well above $300, beginning no later than January 1, 2015. Compare that to the typical current per diem rate in our area, which averages $200 -$220. A sudden 50% increase in cost will be more than many families can afford, forcing them to choose other less desirable alternatives to aging in place.