As noted in prior posts, as a home care company in California, until January 1, 2014, Support For Home employees were able to work as many hours as they wished, without incurring overtime. he obvious question is, “Why was that a good thing for professional caregivers?” From a “common sense” point of view, it does not sound like a good thing, right? Everybody should be entitled to overtime wages after X number of hours per week or per day, right?
Well, as pointed out in earlier articles, there are a number of factors which make the introduction of overtime very, very problematic. The first and foremost issue is that such services are not “clinical” (not delivered by an RN or Physical Therapist or doctor, for example).
As a result, these non-clinical health care services are not covered by Medicare or Kaiser or Blue Cross or whatever medical insurance you wish to name. The only insurance that helps is Long-Term Care Insurance, which far too few families have. What that means is that the care is “private pay,” with all the money coming from the clients (most of whom are on fixed incomes) or the families, that have their own life expenses to worry about.
So, before the new laws removing overtime exemptions from professional caregivers in California, as of 1/1/14, for 24-hour care, which many clients need, the law was that the caregiver had to be paid for every hour of the 24-hour shift. Some home care agencies argued that a federal “sleep time” exemption, backed up by some California Wage Orders, reduced the number of hours that needed to be paid, but Support For Home paid all 24 hours of the shift, and a number of other, good agencies were following suit. That meant caregivers were paid $192 (plus other personnel expenses) for a 24-hour shift.
The elimination of the overtime exemption meant one of several things was bound to happen, here in California:
- If overtime costs were passed on to clients and families, many of them would be forced out of their homes, into facilities or other living arrangements with much less supportive environments. A patient / client needing 24-hour care is not going to thrive in an Assisted Living Facility (ALF), no matter how good the facility, as ALFs simply are not staffed to provide true, individual, around the clock care.
- Many clients and families move to private caregivers, either legitimate independent contractors or, fare more commonly, “under the table” employees. This under the table marketplace means no recourse for clients – or for private employees – and a tremendous decrease in revenue for the state and federal governments, including for workers compensation and unemployment insurance programs.
- Agenciesare forced to look at other business models,in order to constrain costs for their clients. These models include:
- Becoming a Domestic Referral Agency (DRA) or adding that business line to their normal employer-based operations. As a DRA, workers are not employed by the agency, but by the client (or, far less often, operate as independent contractors);
- Limiting hours worked by caregivers. We know of many agencies that are providing 24-hour care by sending in six (6) caregivers over the course of the week, each working no more than 8 hours per shift and 40 hours per week. Thus, a caregiver who used to work four (4) 24-hour shifts, making $768 per week, may now only be working 40 hours, at $10 per hour ($400 per week). Their wages suffer, as does the continuity and quality of care for clients / patients.
- Increasing use of the sleep exemption provided in federal law and some California Wage Orders. As noted above, we saw a trend away from this in home care – we had never used the sleep exemption – prior to the loss of the overtime exemption. Now, we see much more pressure on agencies to use the sleep exemptions to control costs.
The bottom line, as I have argued many times before, is that caregivers are underpaid – there is no question about that – and they will continue to be underpaid until the non-clinical health care services they provide are covered, at least in part, by Medicare and other medical insurance providers. If readers – and politicians – really care about this problem, that is where they will focus over the next several years. Unless that happens, as minimum wage continues to increase, in California and elsewhere, both income for caregivers and costs for clients will continue to worsen.
I would love to hear your responses, whether you agree or want to blast me. 🙂 Best wishes. Bert