Last week, I posted about the new proposed rules governing 24-hour home care from the US Department of Labor, saying “Either I or They Don’t Get It.” The new rules would remove the current federal personal attendant exemption from overtime provisions of labor law, making 24-hour care for almost all clients and families virtually unaffordable. Hiring a home care agency that employs Home Care Aides / caregivers would increase costs by about 235%!
As I said, very few clients and families will be able to afford that cost. The new US Department of Labor rules will keep the overtime exemption for caregivers hired directly by the client / family. So, the option that will be financially attractive, on the surface, to clients and families, if the new rules go into effect, will be to become the employer of record, themselves.
I say “on the surface” because there are real dangers in that approach, and the US Department of Labor and the White House do not appear to get it — either that or they do not care. So, what dangers lurk under the surface of that approach — the client or family becoming the employer of record?
Most clients and families are not set up to be employers. Even if their intention is to be honest, their are going to be mistakes made. If they try not to be honest — or do not know how to act as an employer — here is what we are going to see:
1. Caregivers’ Social Security is not going to be paid, nor will the employer’s portion. At some point, the caregiver is going to find this out — probably after a lot of pain. At that time, the government is going to come swooping down looking for past taxes, penalties, first-born grandchildren to hold hostage, … (Well, OK, they may settle for second-born).
2. Caregivers are going to hurt themselves, tripping over an ottoman or pulling clothes out of a dryer or … The caregiver (the clients’ / families’ employees) are going to file a Workers Compensation claim. Most families are going to assume their homeowner’s insurance kicks in to cover. Surprise, surprise, it does not. Homeowner’s insurance will not touch domestic employees, and that is what the caregiver is. So, the Workers Comp folks ask where all the back taxes are — and, of course, they add some serious penalties (I hope their are enough grandkids to use as collateral!).
3. The client / family will decide that they do not really like the current caregiver (their employee), so they fire her. No problem, as long as they live in an “employment at will” state. If not, things could get interesting. But, let us say that employment is terminated successfully. The former employee goes down to file an Unemployment Benefits claim, as is her right. The State calls the client / family and asks where the taxes are to support the new claim (and, you guessed it, there are penalties).
4. Because the client and family were not experienced in hiring caregivers, they did not do an adequate background check to make sure they were hiring an honest person. $20,000 of precious family heirlooms are now missing, and everyone knows where they went. Remember the problem with homeowner’s insurance we talked about above (it does not cover domestic employees issues)? There is no dishonesty bond in place, either because the family did not know they should have it or it was just too expensive for them, as a single client.
All of the above problems would have been avoided if the US Department of Labor had not published new rules raising the cost of working with a legitimate, honest home care agency (members of the National Private Duty Association – NPDA) that provides protection against all of these problems (there are more dangers, but I am getting too depressed to keep going).
The comment period is under way at the US Department of Labor. We hope many folks involved in elder care and home care, as well as clients and families now receiving care, will get involved. This is not about home care agencies (including us at Support For Home). The co-owner of this agency and I came from the high tech industry, where, frankly, we made more money. We do what we do now from passion. That passion is why I am writing this post.
Best wishes. Bert