New rule may increase pay for home care workers

Home care workers in North Carolina will soon be entitled to minimum wage and overtime under new federal standards.

The U.S. Department of Labor issued a letter Sept. 2 to Gov. Pat McCrory urging the state to prepare to comply with the new standards that will affect thousands of caregivers and clients in the state.

The Home Care Final Rule – which was supposed to go into effect at the beginning of 2015 – was reinstated Aug. 21 by a federal appeals court after being challenged by home care companies. The rule ensures caregivers are given the same work protections as other employees.

Neal O'Briant, an N.C. Department of Labor spokesman, said in an emailed statement that the letter is under review by the agency.

Before the rule was reinstated, a 1974 federal law exempted domestic caregivers from minimum wage and overtime requirements. Since then, the industry has transformed from casual caretakers employed by families to full-time employees at large agencies which provide long-term in-home care to elderly and disabled individuals.

In-home care is now one of the fastest growing occupations in the state, said Allen Freyer, the director of the Workers' Rights Project at the N.C. Justice Center. Currently, caregivers in North Carolina are paid an average of $9 an hour, above the federal minimum wage of $7.25. So the biggest impact will likely be their eligibility for time and a half pay when they work overtime.

“They're caring for seniors and providing them with dignity in their retirement,” Freyer said. “And yet we spend very little money taking care of them.”

He said better pay for workers will result in higher-quality care for clients.

Sixty-two percent of home-care workers left their jobs last year. Freyer said these high turnover rates will likely drop when workers are paid more for emotionally and physically demanding work.

With better pay, people who often have to balance multiple jobs will have more stable schedules. That stability is necessary for quality care, Freyer said.

“If that person is trying to juggle three different jobs, it becomes a lot harder to provide stable and consistent care to a single client than it would be if they got paid adequately,” he said.

To avoid overtime hours, agencies typically put a cap of 40 hours a week for each client a worker visits, Freyer said. However, caregivers are usually caring for multiple clients at once, he said.

Often, they end up surpassing 40 total hours. The change will make sure workers are paid overtime for those extra hours.

Compensating workers for overtime hours may be a challenge for employers, since North Carolina's Medicaid reimbursement rate, at $13.88, is one of the lowest in the country and some clients depend on the program for long-term in-home care.

The U.S. Department of Labor letter was sent to governors of each state, warning of the change and providing assistance to employers in its implementation, spokesman Jason Serbey said in an email.

The federal agency will wait to enforce the rule until 30 days after the appeals opinion becomes effective, according to its website. The opinion becomes effective Oct. 12, so rule enforcement will likely begin in mid-November. There’s still a chance that the new regulations could be delayed yet again. The home care associations are seeking review of the mandate by the U.S. Supreme Court.

Ari Medoff, chief executive officer of Nurse Care of North Carolina, said he doesn’t think employers have enough time to make big changes, especially since the rule has gone back and forth in the courts for so long.

“Six weeks, or whatever it is, is ridiculous,” Medoff said. As Nurse Care of North Carolina cuts hours from caregivers to stay under 40 hours per week, Medoff said caregivers may have to find second and third jobs to make ends meet.

“We've actually already been having job applicants call us saying that their hours are being cut by other agencies and they want to pick up extra work with us,” he said.

He said clients will either have to pay more, scale back the hours of care they receive, or take on another caregiver.

This story was originally published September 9, 2015 at 3:55 PM with the headline "New rule may increase pay for home care workers."