How to avoid a Costly but Common Caregiver Issue

Does your agency offer live-in services? This service offering allowed agency owners the opportunity to serve a broader client base by providing a more affordable alternative to clients that needed constant care and wanted to stay in the comfort of their own home. Since 2015, this service option has widely disappeared across the US, leaving many to ask why.

The primary reason for the disappearance is a major change that was made by President Obama's administration to the federal overtime regulations. We are not labor attorneys so we will skip all the details CLICK HERE to read a little about it, but this change in policy removed the companionship exemption to overtime laws, stopping many agencies from being able to offer the service. In all fairness, President Obama was not the first to want these changes, he was just the one that was able to enact them.

There are many who will argue that this was a good change in policy and just as many who will disagree, politics aside, the change was made and, as is typical, businesses adapted to the changes to be able to continue to operate. If you want to read more, CLICK HERE to read an article that highlights some of the concerns at the time. While these changes to policy have been challenged and changes, as is common in politics, the rules about live-in caregivers have not changed back.

Politics aside, one thing we can all agree on is that not following the labor laws can get us in a lot of trouble. This goes without saying, and while we all know that not adhering to these rules can result in fines, some of us think we can get away with or circumvent the law. One way that some home care agencies thought of to avoid the overtime was to classify caregivers as independent contractors. The belief was that this practice would allow them to avoid paying overtime.

This belief was very wrong. We discuss this in the above video in a bit more detail but, as Christian Home Healthcare Corp recently found out, violating the Fair Labor Standards Act will not end well. They were ordered by the U.S. District Court of the Western District of Pennsylvania to pay back more than $1.6 Million in back wages, according to a news release by the Department of Labor dated March 3, 2021. Feel free to read the article if you want more details.

Could this have been avoided? Yes, quite easily really. Does this mean that Live-in as a service option should die? Absolutely not! This recent, and harsh example of how not to do things actually got us thinking on the subject. Is it really that complicated to put a solid live-in program in place? The answer is no, it just takes research and planning.

  1. First, we recommend you look at the DOL GUIDE TO PAYING MINIMUM WAGE AND OVERTIME TO HOME CARE WORKERS and get familiar with how to pay, if you want more clarity, the Department of Labor also offers FACT SHEET #79B: Live-in Domestic Service Workers... as an additional resource.

  2. Now that you got familiar with the rules, contact a local labor expert, attorney or your state Labor Department to see if the rules change locally. If you are a California resident, I believe they do as well as in other states.

  3. Now comes the tricky part, do you think you could find caregivers in your area that are willing to move in to someone's house and live with them for days or even weeks at a time?

  4. Calculate how to price your offer. Remember, you want to offer a daily rate to your client that is based on an hourly wage for your caregiver. (We have a course on this to help)

  5. Get help. CLICK HERE to schedule a free discovery call so we can discuss how we can help you put your program and pricing in place.

Live-in programs are great long-term profit generators and, as long as you put all the pieces together properly, they can create that market differentiation that will allow you to build confidence in your community, trust with your referral partners, and grow your business long-term.

Leave a comment and let us know what you think. Also, don't forget to like this article and the video.