Employees and Legislators, Continued

Today I received an email from Betsy C, as follows:

Bert — Today I read with interest your post dated 10/17/13 “Employees Smarter Than Legislators” which concluded with this statement: “In the next post, I will talk about the other staffing and compensation models that we have explored, trying to find a good solution for caregivers and clients, but it is an ugly situation the California legislature has created – not for businesses, which may have been the aim of some politicians, but for caregivers and the clients they serve.”

I have looked for “the next post” addressing this, but cannot seem to find it. I was just informed today about this new law by my parent’s caregiving agency. They are receiving 24/7 care in their home & this news has ruined my day. I will be speaking with their agency soon to discuss how this is going to work….. but would be VERY interested in the “other staffing and compensation models that we have explored, trying to find a good solution for caregivers and clients”.

I look forward to hearing from you soon.

Betsy C, Anaheim, CA

I have, indeed, been remiss in not posting the results of our analyses and what we are talking to our Home Care Aides and our clients and families about, now that January 1 and the loss of the caregiver overtime exemption is so close. Thank you, Betsy, for prompting me.

So, here is what we have done and are doing and what we know:

  • The owners of Support For Home In-Home Care will continue to operate that employer-based home care agency, but have also been forced by the economics – for caregivers and clients – to create another company, ADL Staffing Services, a domestic referral agency, as an option. More on that, below.
  • For our current clients needing 24-hour care, the cost, right now, is $305 to $330 per 24-hour shift. As of January 1, 2014, that cost goes to $435 per shift. Over the course of a month, that is an increase of $3000 – $4000 a month over current costs. Very few families have indicated they can absorb that increase.
  • As of July 1, 2014, a 24-hour shift increases another $40 – about $1200 per month – due to an increase in California minimum wage.
  • For clients needing 24-hour care, during which there is no sleep for the caregiver(s), providing 2 12-hour shifts will cost $475 per 24-hour period, as of January 1.

At Support For Home, we have long believed that an employer-based agency is the best option for most clients and their families, as the employer takes responsibility for liability, workers comp, dishonesty bond, and unemployment insurances, as well as payroll taxes. However, these much higher levels of cost force many of us in the elder care industry to rethink what we are doing and offering. For us, while we will continue to run Support For Home as an employer-based home care agency, the creation of a domestic referral agency (DRA) is an inevitable outcome.

The independent domestic workers who will be available through our DRA will be strongly encouraged to have their own business licenses. If so, they will manage their own businesses as independent contractors to clients or become the employees of the clients. Workers with their own businesses control their work hours, wages, and so forth, rather than being constricted by AB241 or other wage and hour laws.

Thus, the costs for these services, through ADL Staffing Services, will typically be in the ranges shown below:

DRA 2 Fee ScheduleAgain, we believe that, for those who can afford the incredible increase in costs, working with a high quality employer-based senior care / home care agency is the best option. For most of our employees it is the best option, as well, and they have told us so. However, need and ability to afford is the critical factor for many of our current and future clients.

Best wishes. Bert


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