Labor Laws for Home Health Care Workers

Home health care agencies must start paying minimum wage and overtime to in-home “companionship service” workers that it provides to the elderly and infirm.

The U.S. Department of Labor recently issued new labor laws for home health care workers that will go into effect January 1, 2015 and is expected to affect about two million workers. The regulation is aimed at helping to ensure that home health aides, personal care aides and certified nursing assistants will have the same basic protection provided to most workers. The new rule applies to employees of home health care agencies, but not to workers employed directly by the people they serve.

Most home health care workers already earn more than the $7.25 an hour federal minimum wage, according to some sources, but many do not receive time-and-a-half pay when they work more than 40 hours a week. In addition, nearly 40 percent of these employees rely on Medicaid, food stamps and other government benefits, according to the government.

Industry officials reportedly say home care workers typically earn $8.50 to $12 an hour.

Decades of Change

The Labor Department announced the change was necessary because the services of companionship workers has changed considerably since 1974 when Congress amended the 1939 Fair Labor Standards Act to protect most domestic service workers. At the time, it left out companionship workers who performed such chores as cooking meals, making beds and doing laundry. They were effectively considered baby-sitters, a group exempt from wage and hour protections.

Most agencies in the home health care industry opposed the change.

In addition to rescinding the wage exemption, the regulation more specifically defines what companionship work is and revises record-keeping requirements for employers of live-in domestic service workers.

If a home health agency supplies workers that provide “fellowship and protection for an elderly person or person with an illness, injury, or disability who requires assistance in caring for himself or herself,” it is considered to provide companionship services and is covered by the regulation. The rule also encompasses care if it is part of the fellowship and protection and does not exceed 20 percent of the total hours each person works each week.

According to the U.S. Wage and Hour Division, if “an employee hired as a companion to an aged individual with a physical infirmity spends more than 20 percent of his/her time doing general household work … that person must be paid at least the minimum wage and one and one-half the regular rate of pay for hours in excess of forty in a workweek.”

Helping People Live Independently

Compared with companionship, care is defined as assisting with activities of daily living such as dressing, grooming, feeding, or bathing and with such instrumental activities as meal preparation, driving, light housework, managing finances, assistance with the physical taking of medications, arranging medical care and other tasks that enable a person to live independently at home.

Not included in the definitions are tasks typically performed by trained medical personnel, such as injections, maintenance of respirators and feeding tubes, or taking blood pressure, the regulation says.

Live-in domestic service employees are exempt from the regulation’s overtime requirements, but they must be paid at least the minimum wage.

A home health care agency cannot claim a wage exemption for a companionship provider or live-in employee, even when it employs individuals jointly with the families or households using the services.

Record Keeping Rules

The regulation also revises the recordkeeping requirements for employers of home health care workers under the Fair Labor Standards Act (FSLA).

Records must include detailed information about each non-exempt employee’s time worked and income, although the regulation doesn’t require any particular format. Records must be kept for three years.

Between now and January 1, 2015, your agency should start reviewing its practices for any potential liability resulting from improper exemption, classification and compensation issues. Typically, new regulations go into effect in 60 days. In this case, the lengthy delay is to give agencies and families time to adjust. Your company should start internal FLSA audits to ensure it will be in compliance with the new regulations when they begin.

Among the issues home health agencies should consider during this period are:

• Switching to an electronic timekeeping system that will allow employees record daily and weekly times worked.
• Reviewing a payroll system to ensure overtime is calculated correctly. Keep in mind that it may be easier to calculate overtime if you switch semi-monthly workers to a weekly or bi-weekly payroll.
• Updating or starting new pay policies and procedures that include a ban of off-the-clock work and an explanation of how employees will be disciplined for violations.
• Providing employees with a list of the types of activities they must record and a clear explanation of what is considered work.
• Outlining your policies for travel, training time, meal breaks and rest periods.

The bottom line is that home health care agencies will need to be extra cautious about their employment practices regarding companionship providers, lest they be sued for improperly classifying employees as exempt or under-paying them.

If you have questions about the regulations, contact GTM’s Household Employment Experts at (888) 432-7972.