UPDATE August 14, 2012. Well, that did not take long — finding a reason to add to this tantrum, that is. I just got a copy of a brochure from a company called Personalized Homecare & Homemaker Agency, Inc., here in the greater Sacramento region.
Why did the brochure stimulate me to add to this earlier post? Well, in the material below, I explained that Wage Orders 5 and 15, which govern payroll to personal attendants (caregivers) in California, says that these employees must be paid at least $176 and more likely $192 for a 24-hour shift. With other personnel expenses (Social Security, Unemployment Insurance, Workers Comp Insurance, …), an employer is going to pay at least 20%-25% in addition to the wages. That means payroll will be at least $211 and more likely $240, if the employer is doing it right.
So, how much is this company proudly displaying as the cost to clients for 24 hours? $230. I leave it to you to guess how much they are paying their employees for 24 hour shifts. If you guess it is not $176 to $192 (and, remember, it really should not be $176 in most cases), you get a gold star.
Okay, this is the last tantrum of the week, I promise, but it is an important one, in our view. I hope I do a good job of laying it out, because there is a fair amount of arithmetic involved, and, worse yet, there are laws and government regulations! 😦
This tantrum is about what professional caregivers should be paid, in the state of California, compared with what most agencies actually pay them. Specifically, in California, what are professional caregivers supposed to be paid for 24-hour shifts? The answer depends on which wage order applies (sorry, but here we go).
For 24-hour shifts, home care agencies in California can use either Wage Order 15 or Wage Order 5 to pay their employees. What is the difference?
Under Wage Order 15, the caregiver is accessible to the client for the entire 24-hour period. If the client needs help at 2:00 AM, the caregiver gets out of bed and goes to help. Under Wage Order 15, the caregiver is on call the entire period and, therefore, must be paid at least $8.00 per hour (CA minimum wage) for each of the 24 hours (a total of $192.00). Under this wage order, the caregiver is exempt from overtime provisions of wage and hour law.
If the home care agency chooses Wage Order 5, the caregiver must have five (5) hours of uninterrupted sleep. That means the client does not have access to help from the caregiver for that five hour period. Frankly, this is the reason we very, very rarely use this wage order. However, if Wage Order 5 is used, overtime provisions of wage and hour law now apply.
So, for a 24-hour shift where the caregiver gets 5 hours of uninterrupted sleep (all pre-scheduled), the employer can actually deduct 8 hours of pay. What? I slept for 5 hours but you get to keep 3 additonal hours of pay from me? Yup.
At this point, the home care agency using Wage Order 5 has to pay the caregiver for 16 hours of work from the 24 hour period. That has to be paid as follows, accoring to the wage order:
- 8 hours at at least minimum wage ($8) = $64
- 4 hours at overtime (1.5 x $8 = $12) = $48
- 4 hours at overtime (2.0 x $8 = $16) = $64
- TOTAL = $176
So, the employer saves $16 from the 24-hour payroll costs. This is another reason we do not use the wage order. In fact, we pay at the higher rate ($192) even when forced to use Wage Order 5). Having saved $16, you think the employer is happy? No so much. Most agencies actually pay somewhere between $125 and $150 for the 24-hour shift, with excuses about meal time exemptions (not actually in Wage Order 5 — they try to use the “best” pieces from federal and state laws, which is a no-no) and other crap.
So, home care agencies, straighten up. Don’t shortchange your clients (cutting them off from care) or your employees (shorting their pay). Do the right thing.
If any agency out there would like to offer a rebuttal, they have an open invitation.
Best wishes. Bert