Home Care Gearing Up for New Overtime Challenges

The home care industry was reeling after the Department of Labor (DOL) ruled in August that workers were eligible for minimum wage and overtime protections. While some groups signed on to a letter urging the DOL to delay implementation of the new requirements, the protections officially took effect this month.

However, there may be more rules on the table that will impact how home care agencies do business even as providers continue to scramble.

Speaking at the National Association of Home Care and Hospice (NAHC) annual conference in Nashville, Pat Drea, COO of Visiting Angels, elaborated on some of the current challenges and upcoming proposals the DOL is considering regarding overtime rules and requirements, and some of the options home care agencies have.

Live-In Services Threatened

The DOL’s overtime ruling also included changes to the live-in services exemption, as it redefined “companionship services.” These workers have typically been exempt in the past from overtime protections but the new ruling means that some home health care agencies may no longer be able to claim this exemption and will have to act in order to avoid being caught with sudden high costs.

The new definition says that companionship services cannot include more than 20% of personal care, and instead shifts the services definition to simpler tasks, like simply being in the home. According to Drea, this change essentially eliminates the previous purpose and use of companionship services.

“It is rare that the people we serve do not require a considerable amount of personal care,” Drea said.

As such, home health care providers won’t be able to claim this exemption to avoid overtime, which would kick in after 40 hours. Care providers will either have to phase out live-in services, reduce hours, or increase staff to avoid other caregivers going over 40 hours per week.

“If there is an ability to provide live-in services without overtime, it would benefit our clients by reducing costs,” Drea said. “It would reduce costs by as much as 50%.”

White Collar Exemption

The DOL is also considering extending overtime via the “white collar exemption,” which defines the salary amount that an employee earns at which he or she is no longer eligible for overtime. Compared to an hourly worker, fewer salaried employees are able to earn overtime.

Drea explained that the new salary amount currently being floated for the exemption is $50,450 annually, more than double the current salary standard. The DOL received more than 2,000 comments from the home care industry on this proposal, which will likely become available mid-2016 and take effect in 2017, according to Drea.

“It’s anybody’s guess what the final rules will look like,” Drea told the forum.

Any change to this figure will likely impact home care agencies regardless of what the exact salary will be, according to Drea. She says that some agencies may have to change current job descriptions and reduce benefits to avoid this.

“You might be better off moving them to hourly and avoiding overtime,” she told home care providers. “Switching the other way is much harder.”

The new requirements have taken the industry by storm, and Drea calls it a “travesty” as the DOL continues to extend overtime within the sector.

“Doesn’t the DOL care about the impact on consumers,” she asked. “It will impact consumers negatively. …It’s an issue that causes our bolded pressure to rise.”

Written by Amy Baxter