The National Association of Medicaid Directors (“NAMD”) is challenging the proposed rule to extend minimum wage and overtime protections to home health care workers. Currently, home health care workers are exempt from the minimum wage and overtime requirements under the Fair Labor Standards Act. Pursuant to the proposed change, any home health care work assigned to a household by a third party, such as a staffing agency, will be entitled to minimum wages and overtime. However, home health care workers that are directly employed by an individual or household will continue to be classified as exempt employees.
In December 2011, the United States Department of Labor (“DOL”) announced the proposed rule change. To date, it is still not clear when the revised regulation will be enacted. Part of the delay may stem from the controversy that the proposed regulations has generated. Labor rights advocates have argued that home health care workers are typically minorities and deserve to be fairly paid. On the other side of the debate, the NAMD has argued that the added cost of paying home health care workers minimum wage and overtime would result in a diminished level of care. Additionally, disability rights groups claim that the elderly and disabled will be forced into nursing homes due to the expected skyrocketing cost of home care. Nursing homes will not be affected by the proposed rule as their workers are exempt from minimum wage and overtime requirements.
Staffing companies should be prepared for the likelihood that the proposed rule will eventually be enacted. In the meantime, these businesses should examine which policies and procedures need to be put in place to comply with the rule change. In particular, businesses will need to consider how to track and record the time worked by home health care workers so that they can be paid on an hourly basis.