Overtime Rule Worsens Caregiver Shortages in Minnesota

The effects of the home care wage rule are taking a massive and unwanted toll on caregivers and their clients in Minnesota.

Specifically, many of the state’s home care agencies are cutting hours and rescheduling employees to avoid paying travel costs and overtime, The Star-Tribune reported. Paying overtime and travel costs is now required under a federal rule that went into effect in October 2015.

As a result, care has been disrupted for hundreds of Minnesotans who rely on home care services, and there is now a “severe shortage of caregivers” in the state, The Star-Tribune reported.

Minnesota’s state-funded personal care assistant program does not have enough money to compensate caregivers for overtime costs, home care agency owners claim. Currently, agencies that take part in the state program are paid the equivalent of $17.01 per hour for services, but that’s not enough to cover the cost of paying a worker—who usually makes between $11 and $13 per hour—time and half for overtime, agency owners explain.

In response, Minnesota Gov. Mark Dayton of the Democratic-Farmer-Labor Party has asked the state legislature for $58 million in new funding through 2019 to help pay for overtime and travel costs for approximately 25,000 home care workers who provide services through the state’s Medicaid program, The Star-Tribune reported.

If the extra funding is granted, Minnesota would join a few other states—including Massachusetts, California, Oregon and Washington—that have moved to help home health agencies cope with the costs of the new labor rule.

Some Minnesota caregivers are donating their time to care for patients in need. When a client requires care beyond the 40-hour caps set by agency owners, or when unexpected emergencies occur, caregivers often work extra hours “off the clock” to guarantee their clients receive necessary services.

Teresa Watson, a home care worker from Brainerd, Minnesota, has worked more than 200 hours without pay since her employer began capping her hours last fall, she told the newspaper. Watson feels obligated to do the additional work because her clients who are bedridden would not receive services otherwise.

“Wage theft in the home care industry is pervasive,” Francis Hall, a caregiver from Ironton, Minnesota, and executive board member of SEIU Healthcare Minnesota, which represents 20,000 workers across the state, told The Star-Tribune. “Every caregiver that I know is donating their time, because they don’t want anything bad to happen to their clients.”

In other cases, caregivers are being forced to leave the industry for higher-paying jobs. Shawntel Harry, a caregiver from east St. Paul, Minnesota, is considering other professions that would pay more than the $13 an hour she currently makes.

“It was a good idea motivated by the best of intentions,” Harry said of the new home care wage rule. “But without any new money, you’ve just cut every caregiver’s workweek. And that’s a recipe for disaster.”

The challenges related to meeting the new overtime rule are not limited to Minnesota.

Nearly 68% of 444 home care providers surveyed by satisfaction management firm Home Care Pulse in November 2015 said they have cut hours in response to the new wage and overtime rules, and approximately 56% of the home care providers revealed they have rescheduled shifts.

Written by Mary Kate Nelson