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home health care

New Compensation Laws for Caregivers

home health care

2016 – Recently, the federal government expanded the minimum wage (currently $7.25 per hour at the federal level) and overtime protection regulations so that they include home health care workers, otherwise known as caregivers.

It’s important to become familiar with this new compensation law so that when you hire a caregiver for yourself or a loved one, you know exactly what they are entitled to financially — even if that caregiver is a friend or family member.

The Companionship Exemption

Babysitters and service workers who are hired to provide companionship to an elderly, ill, disabled, or injured person are exempt from this new law, meaning they are not entitled to minimum wage or overtime pay.

Some examples of “companionship services” include going for walks, playing games, reading, watching television, running errands, etc. with the client. If these types of activities are the caregiver’s sole purpose, then that worker is not covered under the Fair Labor Standards Act (FLSA) protections.

Performing Care Services

The companionship exemption does not apply to a caregiver if he or she spends more than 20% of the workweek performing “care services.” Some examples of these services include anything that assists the client with daily life, such as getting dressed, bathing or showering, using the toilet, transportation, eating and drinking, managing finances, making arrangements for health and medical care, and completing light housework.

Additionally, if the caregiver is employed by a home health care agency, then the companionship exemption can never be claimed.

Live-In Caregivers

If a live-in caregiver is hired directly by the client or someone acting on their behalf, then that worker is entitled to minimum wage, but not to overtime pay. However, if the caregiver is employed by a home health care agency, then they are entitled to both minimum wage and overtime pay.

Under FLSA regulations, a live-in caregiver is defined as someone who lives at the client’s house full-time, or spends at least 120 hours or five consecutive days or nights there per week. Because these caregivers are not necessarily “on the clock” the entire time they are at the client’s home, employers do not need to pay for time spent sleeping, eating, or otherwise occupied by non-work activities.

Payroll Taxes

Another consideration you or your family must make is that you (or your family, whoever is the official employer) are obligated to pay payroll taxes unless the caregiver is with an agency.

Many people think it’s fine to pay cash “under the table,” but this is actually illegal. When you hire a caregiver, regardless of whether you know them or not, and regardless of the payment method you arrange, you are an employer in every sense of the word — and as such, you are responsible for payroll taxes.

Bradford & Holliman Are Your Long-Term Care Experts

No matter who you hire as your caregiver, it’s important to have a written contract outlining that person’s responsibilities and rights. The Department of Labor has created a guide for this situation, which you may find helpful as you consider how much it will cost to hire a home health care worker.

Most importantly, make sure you speak with an attorney who is an expert on elder law, long-term care, and life care planning. Here at Bradford & Holliman, we know all the ins and outs of caring for yourself or your loved one, and we can walk you through every step of the process as you consider hiring a caregiver.

Don’t hesitate. Contact us today!