A federal appeals court judge ruled in August that home care agencies must now follow the same overtime laws that most every other company has.
It was previously referred to as the Companion Care Exemption and it has been in place since 1974. The idea was that someone hiring a companion to make sure an elderly loved one was safe at home shouldn’t have to be burdened with the additional costs of overtime.
As more and more home care agencies opened, the exemption was extended to them, as they essentially were still in the role of care provider and the client family was still in the role of paying to care for a loved one.
This law has been tested and challenged numerous times over the last 40 years, but had always survived those challenges until now.
The idea behind the elimination of the exemption was said to be elevating the suppressed wages of the caregivers.
According to an article on Think Progress, “1/3 of caregivers surveyed in New York City made less than $15,000 per year and nearly 40% relied on public benefits to get by.”
Many caregivers work twenty or more hours of overtime per week, essentially meaning they would get paid for 70 hours when they work 60 hours under the new overtime law. This represents a 17% increase in the caregiver pay if the overtime were permitted.
For approximately 95% of the caregivers working for agencies, it will mean they will no longer be able to work 60 hours, but instead be limited to 40 hours. This represents a 33% reduction in their pay, and ultimately means the caregiver will look to another company to regain the 20 hours they lost.
Some companies might talk to clients most impacted by this change and offer them the opportunity to pay for the increased cost of keeping the same caregiver.
Some companies will try to offset the lost wages resulting from fewer hours by raising the base wage for caregivers impacted by the law change.
If you have questions about this change in the overtime laws, contact us at Care from the Heart. If you are a caregiver looking for extra hours, you can find our employment application by clicking here.