Home Health Care Overtime Requirements

Home Health Care Overtime Requirements

Beginning in November 2015, all Home Health workers throughout the country became eligible for time and a half pay for any hours worked past 40 hours in a week. This is a brief history of how that came into place and how it effects clients receiving care.

1974 Fair Labor Standards Act (FLSA)

In 1974 Congress exempted “domestic service” employees from the FLSA’s minimum wage and overtime provisions for those who provided “companionship services” to elderly people or people with illnesses, injuries or disabilities who require assistance in caring for themselves.

This was a big deal because in 1974 there were not a lot of Nursing Homes in existence so a large number of people who needed care received it in their home. This exemption allowed consumers who received care at home to have fewer caregivers for a greater continuity of nursing care and offered a cost savings to consumers, mostly elderly, who needed these services.

To clarify this position, the Department of Labor issued two specific Fact Sheets.

DOL Fact Sheet #25

DOL Fact Sheet #25 was designed to clarify what caregivers are exempt and what caregivers are NOT exempt. Exempt caregivers included domestic help (Maids, Cooks, etc.) but also included HHA’s, CNA’s, Homemakers, Companions and Live In Caregivers. Caregivers were NOT exempt included Registered Nurses (RNs), Licensed Practical Nurses (LPNs) and other Skilled Professionals, although they may have other exemptions.

DOL Fact Sheet #79

DOL Fact Sheet #79 was designed to clarify what constitutes a Private Home. A Private Home included an free standing dwelling, an apartment, a condo, an Independent Living Facility and in some case, an Assisted Living Facility.

On October 1, 2013 the DOL issued The Home Care Final Rule removing the Home Care worker exemption. The new rule would be effective January 1, 2015. Ironically, despite being called The Home Care Final Rule, there were a few bumps along the way.

In December 2014, literally days before the Law was to go into effect, US District Court Judge Richard Leon vacated the decision putting the exemption back into place. This was based largely on lobbying and lawsuits filed by Home Care Associations across the county and multiple states including CA, IL, & AZ.

The argument was that removing the exemption would result in increased costs for a primarily elderly population. In fact, the State of Illinois estimated an increase of $94 Million in additional costs based on removing the exemption.

Then The Home Care Final Rule was revisited.

Following Judge Leon’s decision, the Department of Labor filed an appeal with the US Court of Appeals and on August 21, 2015 three (3) Appellate Court Judges from the District of Columbia overruled the 1 Judge from the US District Court and issued an Opinion which affirmed the validity of the Final Rule.

Their Opinion automatically becomes a Mandate (or went into Law) 52 days later on October 13, 2015.

The Department of Labor subsequently identified that they will not enforce the ruling for at least 30 days so the actual date of implementation became November 12, 2015.

After November 12, 2015, all home care caregivers must receive time and a half pay for any hours worked over 40 hours.

So, why is this important to know?

It is important to understand that there is now a 40 hour Limit for home caregivers, whereby Overtime is required for all caregivers who work beyond 40 hours.

Most clients want to have as few caregivers as possible to minimize the number of staff coming in to the home. Most times in the past when a client had 24 hour care, shifts were scheduled in 12 hour increments to minimize the number of staff. Looking at just the evening shifts, in the past, we would normally schedule 1 person for 4 days of care and 1 person for 3 days of care. Under the new law, this is not acceptable since one employee would be working 48 hours unless the client is willing to pay for overtime hours, which most clients prefer not to do. As a result, a greater number of caregivers are needed to complete the schedule without incurring overtime.

In addition, this may lead to increased direct and/or indirect costs. It can lead to increased in Direct Cost if a client chooses to have a caregiver greater than 40 hours in a week, thereby authorizing overtime. It can result in an increase in indirect costs because a company may need to increase their overall rates based increased overhead costs. There will likely be instances when an employee needs to be paid for overtime but those overtime charges cannot appropriately be charged to a specific client. An example would be when an employee who already worked for 40 hours but their relief staff did not show up on time due to their car breaking down or some other reason. In this case, the employee MUST be paid overtime but it may not be fair to charge that overtime to the clients. Companies may therefore increase their rates in anticipation of these types of events.

Ultimately, it is valuable for consumers to understand the Department of Labors Overtime requirements for caregivers and how they may affect the care that a consumer receives.