Managing your caregivers minimum wage and overtime requirements.
Managing in home caregiver overtime pay can be confusing. Clients requesting the same caregiver over 40 hours need to consider minimum wage and overtime requirements.
How Abby Services helps clients manage their in home caregiver overtime pay and minimum wage requirements.
As part of our ongoing commitment to compliance with all state and federal regulations, we at Abby Services wanted to ensure our clients are aware of specific Labor laws related to their private caregivers.
The United States Department of Labor released a document titled “Paying Minimum Wage and Overtime to Home Care Workers” on March 30, 2016. This document explains that consumers can and will be ultimately responsible for compliance with overtime laws.
Why did the overtime law change?
At one point overtime requirements for in-home care was not the case. In-Home Caregivers qualified for what was referred to as the Companionship Exemption. This simplified in home caregiver overtime pay. The Companionship Exemption at its simplest allowed caregivers to work over 40 hours per week without being forced to comply with overtime requirements.
This was a win for clients seeking consistent reliable care and was also a win for caregivers seeking to provide their services.
Abby Services believes the elimination of the Companionship Exemption was harmful to clients by affecting continuity of care, and the ability to fully self-direct their own care.
The decision was also harmful to Private Caregivers by limiting their autonomy and earning potential.
Unfortunately, Abby Services, and the individuals we serve, must recognize these laws or risk penalties for non-compliance.
So what are the options for families seeking in-home care?
- Clients can limit their caregiver to 40 hours per week.
- Clients may elect to receive care from caregivers available who have not met the overtime threshold.
- Clients can choose to pay their caregiver overtime for hours worked over 40 per week.
- Clients and their caregivers can discuss cost-neutral billing to manage overtime burdens while complying with overtime and minimum wage requirements.
Many clients will choose to comply with these requirements by limiting their caregivers to 40 hours per week. Other clients, and caregivers, have chosen to renegotiate their rates to manage the burden of overtime. Should you have any questions please let us know.
One difficult situation arises when a private caregiver elects to work for multiple clients. Although an individual client may not exceed a 40-hour work week, collectively they may. In these situations caregivers and clients may negotiate a rate that factors in overtime requirements, unfortunately, the situations where this is practical are limited and impractical.
One mutually favorable scenario clients and their caregivers have requested, and chosen, is an option sometimes referred to as cost-neutral or budget-neutral billing. In this scenario, clients and caregivers negotiate and establish billing and pay rate complying with overtime laws, that would be equal to traditional non-overtime rates.
This cost-neutral model has been called into question. The safest option is to accept that if you wish to have your caregiver for over 40 hours a week, a client should pay overtime or consider supplemental caregivers to manage their overtime burden.
Ultimately the choice in managing these issues lies with clients and their caregivers. Should you have any questions please contact us so that we can help, we are here for you.
Many clients and private caregivers have asked what they can do to fight this change. Our lobbying group The PCA (Private Care Association) has proposed Senate Bill S.2221 and House Bill H.R.3860 which is an effort to get the Companionship Exemption Reinstated.
There are a lot of Republicans that have agreed to co-sponsor the bill. We are working on getting support from Democrats. PCA has had several say they would co-sponsor the bill if other Democrats would also put their names on it.
We are urging caregivers, patients, and their families to contact their Congressmen and ask them to support our bill! Here is how to find your congressman.
2-2-24 Update! U.S. Congressman Tim Walberg Introduces Bill to Help Ensure Elderly Have Access to Affordable Companion Care.