The U.S. Department of Labor (DOL) recently issued an opinion letter allowing home care agencies to implement consistent shift rates that include pre-payment of overtime for caregivers who provide live-in services.
In this case, a “live-in shift” is defined as being on the job for 24 hours or more at a time.
Broadly, the DOL’s opinion letter makes it administratively easier to compensate live-in caregivers. Live-in caregivers work extended periods in a client’s home, even residing there on a near-permanent basis in some cases.
Specifically, the guidance from DOL allows home care agencies to blend anticipated overtime hours worked by the end of the work week into each daily shift, before the overtime is actually earned for the week. This allows agencies to pay the same rate for each shift based on total anticipated hours.
Typically, compensation for live-in caregivers is quantified on a per shift basis, with some agencies quoting pay rates.
Contextually, the compensation process for live-in caregivers became more complicated in 2015 after regulators decided to eliminate a previous live-in exemption, Angelo Spinola, co-chair of the home health and home care industry group at law firm Littler Mendelson, told Home Health Care News.
“[Live-in caregivers] were paid a flat day-rate, and there wasn’t a lot of concern or consideration as to how many hours they were actually working,” he said. “The law changed. But the industry didn’t change for a while, and you still have companies that are unaware of what it is that they need to do to be compliant.”
Getting an opinion letter from the DOL on this matter was the result of ongoing legal efforts from Littler Mendelson, which represented a group of home care providers.
Spinola called this effort a good example of the home care industry working together to get in front of an issue.
“More than ever, this industry has been working together on these sorts of projects to proactively attack and address issues that have hounded the industry for years,” he said. “This was a small group of providers that pooled resources to achieve this result that will be useful and helpful for the entire industry. We are seeing that in multiple states.”
For providers, the DOL’s new guidance supplies definitive answers on how to compensate live-in caregivers. When handled incorrectly, this was a process that potentially spelled legal trouble for providers.
“There have been so many attorneys who have brought class-action lawsuits on behalf of live-in caregivers — making the argument that the shift-rates are impermissible day-rates,” Spinola said.
Lowering the risk of future litigation against home care providers could result in more companies offering live-in services.
Amid the COVID-19 public health emergency, the demand for live-in services has grown, with more seniors opting to shelter in place.
Spinola pointed out that, in the past, some clients have shied away from offering live-in services at their home care agencies to avoid legal challenges.
For home care agencies looking to start providing live-in services, setting them up the right way will be the key to success, according to Spinola.
“You have to understand what the rules and requirements are in your jurisdiction, in your state,” he said. “Have a live-in agreement that explains those rules and expectations on the caregiver side and on the client side, so the client understands how many hours they have contracted for.”
Spinola noted that agencies have run into trouble when trying to reverse engineer rates without regard to the actual time that was worked.