July 16, 2016

New rules for overtime could cost home-care workers

By: Tom Steward

New U.S. Department of Labor regulations mean almost 2 million home-care aides, who often work long and unpredictable hours, will be paid time-and-a-half for clocking more than 40 hours a week.

But the feds may be doing more harm than good in the case of some of the home-care workers, and the care recipients they set out to help. The changes amount to an unfunded mandate, without additional money for small businesses already facing low margins to pay for it.

Something had to give.

“Most agencies have sent out letters and will no longer pay overtime,” said Dena Belisle, owner of Adena, a provider agency in Lakeland. “I have gotten several clients from them, due to that change. They are not paying overtime, period; anything over 40 hours, which is really sad.”

The rule ends the so-called “companionship services exemption” for personal care assistants, or PCAs, who help the elderly and individuals with special needs — often family members — stay in their homes through subsidized care.

“We believe the Rule is the right policy,” a U.S. Department of Labor announcement says. “Both for those employees, whose demanding work merits these fundamental wage guarantees, and for recipients of services, who deserve a stable and professional workforce allowing them to remain in their homes and communities.”

But Minnesota providers already see the fallout many predicted all along: increased costs and confusion among care recipients, along with reduced overtime and overall wages for some home-care workers.

”None of this is helpful to clients, workers, agencies or the union for that matter,” said Shelly Elkington, owner of Avenues for Care, a Montevideo in-home-care agency. “It’s so heavily bureaucratic that it doesn’t make sense … . How sad for those who fought and advocated for this, and then to have it not have any positive impact on the workers.”

“In general, providers are simply asking how it affects them and what are they required to do,” said Karen Smigielski, a Minnesota Department of Human Services communications officer.

Amelia Bray, a White Earth resident who uses a wheelchair, relies on two home-care workers, one usually working 60 or more hours a week. But the 62-year-old rural resident just learned the agency that coordinates her care may be tweaking workers’ hours and pay.

“My nurse came in last week and said the PCAs have to pick one way or the other,” Bray said. “If they did the overtime, they’d have to take a cut in pay from their 40 hours. Then, they could have their overtime.

The federal rule requires that home-care aides are paid the $9 an hour state minimum wage, though many Minnesota providers already paid PCAs $12 or more for all hours worked. Members of the newly formed SEIU Healthcare Minnesota home-care workers union get paid a minimum of $10.75 an hour.

“Wage guarantees will help to better meet the increasing demand for the essential services and supports that these workers provide to make it possible for elders and people with disabilities to live in their homes and communities,” said Robert Espinoza, vice president of the labor-aligned Paraprofessional Healthcare Institute in an October statement on the changes.

But facing finite funding, home-care agencies have begun pro-rating their hourly rates in response to their increased labor costs. Hourly wages get adjusted downward to compensate for increased overtime pay, allowing agencies to meet Washington’s new rule while maintaining employees’ total hours and pay.

“Nobody’s wages changed, we just can manipulate that wage to make sure that we follow within the mandate of the overtime,” said Elkington, the Montevideo provider. “You do have to watch it, though, if you have a choice (union) worker. You do not go below the wage floor or you’re violating the union contract.”

”Most of my clients get 12 hours a day,” said Belisle, the Lakeland provider who also cares for her son, who has special needs. “I’ve got a couple that use 16 hours a day. So in order for them to get that overtime, we have to pro-rate it or a lot of them would only have one PCA.”

Providers recently formed the Minnesota First Provider Alliance to respond to regulatory and industry challenges.

The national home care industry on Monday announced an appeal was filed with the U.S. Supreme Court to review the new regulations.

“Without increasing spending from government home care programs or imposing higher charges to vulnerable patients, home care aide employers can only restrict working hours and avoid overtime pay,” states the National Association for Home Care and Hospice website.

This article was originally published by Watchdog.org on November 24, 2015.

Tom Steward formerly served as staff report for Watchdog.org.