Wednesday, March 02, 2011

Overtime pay for caregivers likely to become big issue as eldercare and health care demands increase

The need for hands-on custodial care of usually elderly family members is constantly increasing, because people (females more than males) can live longer than they could have in previous generations, with great levels of disability from various reasons, such as heart failure, strokes, respiratory disease, and Alzheimer’s.  The situation is a mixed bag:  aggressive treatment such as coronary bypass surgery at advanced age (the latest I’ve ever  heard of is 91, and one pacemaker was implanted at 99) can give more years of good quality, but then is likely to be followed by a longer decline. This was the case with my own mother, who got the bypass graft at 85 and who passed away in late 2010 at age 97. At the time of the operation (1999), it was novel for her age, but would not be now. Other aggressive treatments are possible, such as a pump for Vice President Dick Cheney while he awaits a possible heart transplant.

This certainly implies a greater demand for future nursing home or assisted living space, which will be difficult to accommodate in the current economic climate. As I’ve noted before, the real estate market might favor building more CCRC’s, however.

All of this leads back to the question of in-home care. Typically, this means that the aging (grand) parents move in with “sandwich generation” adult children, or the reverse happens, which might mean considerable social or even legal pressure (in states with filial responsibiliry laws) for childless adults to move in with aging parents to care for them.

This also means greater use of in-home care agencies, which screen workers and provider HR and payroll services.  Such workers typically don’t make very much (the agencies tend to charge $18 to $21 an hour, but take a lot of this for business profit). Demand for their services is considerable, but many families don’t have the resources to pay for them, and state and federal programs, while proposed and sometimes in force, are limited by economic crisis and budgets.  That can mean that work for caregivers, many of whom come from overseas, can be unsteady despite the demand.

There is more pressure that caregivers be able to earn overtime and benefits, and the new health care law (so called “ObamaCare”), however contested right now by the GOP, could eventually mean that many home health agencies would have to come up with ways to provide health insurance coverage, which will increase the cost even more for families.

There is also the situation of live-ins. In 2007, the Supreme Court ruled that live-ins would be generally “exempt” from overtime laws. The case is Long Island Care Care At Home LTD., et al, Petitioners, v. Evelyn Coke, resolved June 11, 2007, with the Cornell University Law School link here.

The Supreme Court reversed a Second Circuit ruling, with the effect of saying that Department of Labor interpretations of the Fair Labor Standards Act do not require that companionship workers paid by third party companies be eligible for time-and-a-half. The New York Times had a stinging editorial (“Congress and the Caregivers”) on the decision June 15, 2007, here.  Another blog called “Aging Maven” weighed in here

The Direct Care Alliance has a statement dated April 27, 2010 “Statement of Leonila Vega on the Department of Labor 2010 Regulatory Agenda and the Clarification of FSLA for Domestic Service Employees, pdf file here.  There is a “statement of Leonila Vega on the Department of Labor 2010 Agenda and the clarification of FLSA (Fair Labor Standards Act) for domestic service employees”.

The “best” explanation that I can find of what all this means is a May 28, 2009 posting on “Caregiver list”, “Home Care Workers Exempt from Overtime for Live-In Caregiving”, link here. Note this key paragraph “The basic rule you can follow is that “companionship services” are exempt from overtime when the care is not hourly. Companionship services include household work for aged or infirm persons, meal preparation, bed making, laundry and other similar personal services. General household work is also included, as long as it does not exceed 20 percent of the total weekly hours worked by the companion. “.   Note the last sentences here “most senior home care agencies do pay for overtime hours at time-and-a-half for hourly caregivers who go past the 40 hour work week, even though depending on the state and the type of care assignment, they may not be required to do so.”

To complicate things, I found another piece in ElderLaw by Miraim Davidson, discussing the Coke case, which explains in some detail that normal household work is not covered by the decision (should not be more than 20% of duties), and moreover claims that the overtime rules still could apply if the caregivers come from an agency rather than a direct here. The article, dated April 2010, predicts that in general families should expect to pay overtime in the future (the article title “Court decisions apply minimum wage and overtime rules to caregivers” implies that), with link here.

It’s typical for some agencies to have rules regarding live-ins; that the patient should not need more than two incidents of assistance during the night time period, otherwise an hourly rate could apply. Agencies may require a separate private room and Internet access; the homeowner could be responsible (to the ISP or the law) should the caregiver somehow abuse the broadband access, so there could be risk there and a need for household rules.

Agencies may sometimes require workers to sign on as independent contractors, and in many states may then be exempted from overtime requirements. Some may pay for holidays (or night differential) but still not overtime per se.

The question could come up, if a family knows that a particular caregiver from an agency has worked more than 40 hours in some weeks, could it be held responsible for the extra half-time differential?  If so, how would it pay withholding tax and social security tax if not set up to do so because the agency does that?  (Tax advisors like HR Block might provide assistance in doing so.) It’s easy to imagine the legal and moral quagmire. 

The whole scenario is changing. In the past, extended families were more cohesive, but the elderly could not live as long with extreme disability. Today, there is diaspora, and increasing demands from the elderly (because of the way medicine is practiced, partly) pulling them back. Sustainability and generativity arguments come into play.

Also, see Mickey Rooney's testimony on elder abuse and the difficult jobs of Adult Protective Services units:

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