USA Today Article on Senior Care Ignites Caregiver Pay Conversation

USA Today reported earlier this week that the Franchise Business Review market research firm found senior home care agencies to be one of the most profitable franchises, even as the industry is fighting the Department of Labor's potential new rule which would allow over-time pay for senior caregivers providing live-in care services.

The senior care industry continues to grow, as seniors are living longer and prefer to age-in-place.  It is true that more and more franchise companeis are offering senior care services.  However, the profit levels reported in the article may not be exactly accurate.  It is important to remember the numbers are based on a survey and it is also important to remember that senior clients may pass away or get better and no longer need senior care services.  This makes the "lifetime value" of a client a very real scenario.  Unlike a Subway sandwich franchise, you will not win clients forever. 

This means there is a revolving door of clients and a revolving door of caregivers.  This impacts costs and profits.

The USA Today article also lead to some confusion by those commenting claiming the senior home care agencies were billing Medicare.  They do not.  Senior home care must be paid for privately or by long-term care insurance.  Because of this, you will not find any fraud - - - believe me, sweet elderly ladies and gentleman comb through every detail of their invoices and will make sure it is correct - - - it is too bad they are not working on Wall Street or for the banks in this country!

Medicare home health agencies are different from senior home care agencies.  Medicare home health has experienced a huge amount of fraud, even by public companies, partly because the Medicare home health services were set-up in such a fashion that fraud was easy.  However, this is changing.  Medicare invoices are going to be easier to read and there will also be more incentives for reporting fraud.

In the  meantime, it is important that senior caregivers receive benefits such as healthcare and fair pay for the work they perform.  WIthout quality caregivers, proper senior care cannot be delivered.  Senior caregivers should receive all the benefits of any employee, which includes Worker's Compensation Insurance, Professional Liability Insurance and Social Security benefits.

Learn more about working as a professional senior caregiver and share with us your feelings on how much caregivers should be paid.  You may also take a sample Certified Nursing Aide test to understand some of the skills trained nursing assistants learn.  Caregiverlist offers a 10-hour online caregiver training course for non-medical caregivers.

The Exemption to Overtime Regulations for Caregivers was set in 2007, allowing companion senior caregivers to be excluded from wage-and-hour standards which would provide for overtime pay.  The 18th Initiative in Obama's "We Can't Wait" campaign would over-ride this exemption.

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Minimum Wage Increases Today But Caregivers Already Earn More

Today the federal minimum wage increases to $7.25 per hour.  While each state offers their own minimum wage law, if it is less than the new federal minimum wage, they must now match this higher amount.  This means 13 states will increase their minimum wage to $7.25 today:  Idaho, Indiana, Maryland, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oklahoma, South Dakota, Texas, Utah.  

Four other states also increased their minimum wage in the month of July (some did it just before the federal deadline - a nice political opportunity for the state government to look better to employees by beating the Feds to this):  Illinois, Kentucky and Pennsylvania, with Illinois increasing their minimum wage to $8.00 per hour.  These other 3 states just matched the federal level of $7.25.  The old minimum wage was $6.55 per hour.

Which states pay the highest minimum wage?  Oregon at $8.40 per hour and Washington at $8.55.  Only 13 states, plus DC, pay more than the federal minimum wage.

Regarding the people who say this is going to put people out of work - - - - unless they are an actual business owner who can't figure out how to save 70 cents in another area, in order to keep their employees happy and able to pay for their basic costs of living, then take their feedback with a grain of salt.  And if it is a business owner who can't figure it out well, maybe he shouldn't be in business?  Employees are the backbone of any business, find away to pay them a fair wage or don't be in business.

Those of us who are business owners and have had more than 100 people working for us, know you can always cut costs someplace, and, if necessary, if you offer a great service, you can always increase your pricing to cover a necessary increase in costs, including increases in costs of living.  And one of the best ways to have great service is to have happy employees, which is worth a few cents.  

The good news?  Senior caregivers are paid more than minimum wage along with benefits by senior home care agencies nationwide.  Senior caregivers are usually paid from $9.00 to $14.00 per hour, depending on the area of the country.  Pay is more in New York than Alabama, for example, as the costs of living are more. In addition, caregivers who are certified as nursing aides or home health aides also receive higher pay when performing those duties.  In addition, many quality senior care agencies provide performance bonuses, incentives, ongoing training and support.

You may apply for a senior caregiving job in your area on Caregiverlist and also find the details on minimum wage laws in your state.

 

 

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Home Care Workers Exempt from Overtime for Live-in Caregiving

We are often asked about caregiver pay and the difference between hourly and live-in care.  Senior home care agencies employ caregivers and provide for all of their payroll taxes and worker's compensation insurance, as required by law.  This protects both the caregiver and the senior client they are caring for in the event of an on-the-job injury as worker's compensation will provide for the caregiver's needs and the client will not be responsible.  The payroll taxes also provide for the caregiver's retirement benefits through Social Security when they retire.  In addition, senior home care agencies have policies in place to protect the caregivers and to make sure the plan of care can be successfully implemented.

Hourly caregivers work a set schedule of hours each week and are paid an hourly rate.  Live-in caregivers stay with a client for a few days at a time, sleeping at the client's home each night and are paid a flat daily rate for their work.  Usually live-in caregivers will receive meals and their own room to sleep in.

Senior home care agencies do pay for overtime pay for employees who work more than 40 hours per week as hourly employees, as required by law.  However, live-in care is not considered hourly work and is paid at a daily rate and because of this, overtime pay is not provided on an hourly work week for live-in caregivers.

The Fair Labor Standards Act (FLSA) imposes minimum wage and overtime requirements on employers and specifically exempts from overtime any employee employed in domestic service employment to provide companionship services to individuals who, because of age or infirmity are unable to care for themselves.  Live-in caregivers meet this requirement.  The Department of Labor created a controversy with respect to this exemption several years ago when it adopted seemingly conflicting regulations.  One regulation refers to persons who provide services "in or about a private home of the person by whom he or she is employed."  You have to love the legal language - they always seem to take the long way around to get to the point, or maybe they just want to make sure lawyers will always have jobs in order to translate this stuff for us.

The other regulation, which helped confuse matters, expands the coverage to persons who are "employed by an employer or agency other than the family or households using their services."  Legal challenges to this have been made over the years, based on the argument that it is inconsistent to the first regulation.

Then Evelyn Coke, a 73-year-old immigrant from Jamaica, sued New York based Long Island Care at Home for failure to pay her for overtime.  A federal court of appeals ruled in her favor, overturning the Department of Labor regulation, determining that it conflicted with congressional intent.  Then the Supreme Court reversed this, taking us back to where we started:  no overtime pay for companion care services.

It is important to remember that each state maintains their own minimum wage laws and their overtime requirements, and some of these laws are specific to home care workers (this is the the term they use, rather than "caregivers").

The basic rule you can follow is that "companionship services" are exempt from overtime when the care is not hourly.  Companionship services include household work for aged or infirm persons, meal preparation, bed making, laundry and other similar personal services.  General household work is also included, as long as it does not exceed 20 percent of the total weekly hours worked by the companion. 

Most senior home care agencies have policies in place which require live-in caregivers to sleep at least 8 hours at night, with a minimum of getting up twice to assist the client, along with a couple of hours of downtime each evening.  At the point when a senior client needs a caregiver to get up repeatedly at night, which would not allow the caregiver to receive adequate sleep, it is time for the client to switch to hourly care.

Note:  most senior home care agencies do pay for overtime hours at time-and-a-half for hourly caregivers who go past the 40 hour work week, even though depending on the state and the type of care assignment, they may not be required to do so.

 

 

 

 

 

 

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Senior Caregiver Pay: How Much Should Caregivers Be Paid?

This past weekend the Washington Post magazine published an in-depth story about senior caregiving, profiling a 63-year-old caregiver, Marilyn Daniel, who cares for multiple senior clients as a home health aide.  The story mentions the turnover rate of 40 to 60% for direct-care workers and the low pay.  Although the article says caregiving does not pay much more than minimum wage, which is actually inaccurate, as the federal minimum wage is $6.55 per hour and Marilyn Daniel is paid $12.40 per hour, nearly double the federal minimum wage.

Caregiving actually does pay much more than the minimum wage in every state and Caregiverlist provides the minimum wage information in every state to help caregivers negotiate their pay rate.  The highest minimum wage is in Washington state, at $8.55 per hour, followed by Oregon state at $8.40 per hour and then by California, Connecticut, and Massachusetts, all paying $8.00 per hour.  Most state minimum wages are somewhere between $6.55 and $7.25 per hour.

As is often noted, the Bureau of Labor Statistics reports the occupation of senior home care aides as the second-fastest-growing occupation in the U.S.A. with projections for a more than 50 percent increase in caregivers during the next decade.

Payroll taxes are typically another 25% of a caregiver's pay (Social Security, Unemployment, Worker's Compensation Insurance), although a caregiver does not see this money as take-home pay, but rather as payments direct to these benefits.

How much do you think caregivers should be paid?  Should there be set increases according to advanced training completed and skills tests?

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