Can Home Care Companies Manage Overtime Hours? Three Successful Models.
(2012). Can Home Care Companies Manage Overtime Hours? Three Successful Models. Bronx, NY.: Paraprofessional Healthcare Institute.
Abstract
As the result of an exemption to the Fair Labor Standards Act, many home care workers are denied the basic federal wage and hour protection afforded to virtually all other jobs because they are construed as providing "companionship services" to people who are elderly and/or infirm. In December 2011, the U.S. Department of Labor issued a Notice of Proposed Rulemaking that, if adopted, would update its regulations concerning the companionship services exemption, significantly reducing the number of individuals to whom it applies and, thereby, extending minimum wage and overtime protection to the vast majority of home care workers.
Opponents of narrowing the exemption argue that the proposed regulations will dramatically increase the cost of overtime for agency providers - because it would have to be compensated at time and a half - with adverse consequences for home care agencies, consumers, and workers. They claim that because of the increased cost of overtime, the cost of care for elders and people with disabilities will become unaffordable. They further argue that, in response, agencies will have no choice but to reduce the number of hours that aides work and disrupt continuity of care for consumers by assigning multiple aides to their clients.
These arguments make several assumptions that are not supported by available data. First, nationally representative surveys show that, for the home care workforce as a whole, the incidence of overtime is low, at less than 10 percent. What is high is the incidence of part-time work, with many aides reporting that they would like to work more hours. Second, the vast majority of states have restrictions on the numbers of hours they authorize under Medicaid, so high-hour cases are uncommon. Third, a number of states - 16 in total - already provide overtime coverage to at least some groups of home care workers, typically those that are employed by agencies.
Still, there are bound to be individual agencies - located particularly in states that don't already provide overtime protection to workers - that, under their current practices, do accumulate overtime hours. If paid at a premium, these overtime hours could have significant financial consequences. The question is, once there is a financial incentive to minimize overtime, how will these agencies respond? And what proactive steps can agencies take to manage their staffing and scheduling practices in order to minimize their overtime costs?
This report examines three home care agencies that successfully control their overtime costs: Community Care Systems in Illinois; Addus HealthCare, a nationwide company; and Cooperative Health Care Associates in New York City. While striving to maintain high standards of caregiver consistency critical to client satisfaction and well-being, these companies have put in place workforce management systems to minimize their overtime costs. As a result they have remained profitable while also paying their aides at least minimum wage and overtime at time and a half.
Previous publication