Home Care Worker Companionship Exemption for Over-time Pay Necessary for Live-in Care Services, Not Hourly Care

Companionship senior care services can legally be exempt from providing caregivers with overtime pay and minimum wage in SOME situations.  Now legislation is being discussed to change this, with perhaps the White House supporting this move.  But the issue that is being debated is largely confused.  Here is a run-down of the law that allows for companionship caregiver exemption from overtime pay, what it really is when applied in the work place and why the current laws meet the needs of both seniors and caregivers.

Caregiverlist would like to bring clarity to this issue since some of the folks debating the topic definitely have a heart for wanting to deliver overtime pay to everyone but unfortunately are missing the fact that licensed senior care corporations do pay overtime, do provide benefits and really do go the extra mile to make sure both the caregiver and the seniors are very, very happy with the care duties.

The overtime pay exemption is needed for live-in senior caregivers, not for hourly caregivers, in order to keep care in the home affordable.  The companion care overtime exemption addresses the reality of the work and the extra benefits that are given which are not the same as hourly caregiver work.

Let's take a look at the facts and how seniors will be impacted if the current laws are changed.

What is the "Companionship Overtime Pay Exemption for Home Care Workers"? 

In 1974, legislation was passed to make home care workers exempt from the Fair Labor Standards Act if they were providing "companion" care.  Companion care is when someone  is not providing hands-on nursing aide care but is simply providing companion care to make sure meals are being eaten, medications being taken and acting as a friendly companion to make sure the senior's day goes smoothly. Think of it as the same as when you visit your Grandmother or elderly parent.  While visiting with them, you are making sure she has her house in order, groceries in the pantry and all of her doctor's appointments and medications on track. You assist with anything she might need help with such as changing a hearing aid or sorting the mail but you are not providing hands-on care with bathing and bathroom visits.  It makes sense that some seniors are going to need just companion care when their relatives do not live near by, right? And this is why senior care in the home has grown by 40% since 2008 as nearly half of adult children do not live in the same town as their parents and 67% of adult children work full-time.

The current law defines "companionship services" as fellowship, care and protection for a person who because of advanced age or mental or physical infirmity cannot care for his or her own needs Allows for 20% limitation for incidental general household work and unlimited care services such as meal preparation, bed making, washing of clothes and other similar services.

The law excludes care and protective services that are performed by trained personnel.

Hourly Care vs. Live-in Care

Hourly caregivers working for licensed senior home care companies do receive over-time pay but more commonly, they are simply not staffed to work for more than 40 hours a week so over-time pay is not an issue.  Those of us who are in senior care understand that there is an emotional component to caregiving and the quality of care will decline if an hourly caregiver does not receive proper time off.

Note: there is also a shortage of quality senior caregivers to work for professional senior care companies - many people still do not know this is a professional career with benefits and training and career advancement opportunities.  In addition, as the hours can be around-the-clock as well as part-time, a very wide variety of schedules must be filled and what is more common is caregivers will work just part-time (20 to 30 hours a week). Any company would be hard-pressed, even if they wanted to do so, to find someone who would work more than 40 hours a week without overtime pay. This is simply not an issue for licensed senior care companies.  When a client needs around-the-clock care, when they are on hospice care at the end of their life, for example, the senior care company will rotate multiple caregivers so that nobody exceeds a 40-hour work week.

Live-in Caregivers are NOT Paid for Overtime Hours but Paid a DAILY STIPEND

This is where the current law exempting over-time pay for companionship care works and works really well.

Seniors are choosing to age-in-place in their homes.  However, when memory loss is present, they will need a companion caregiver with them around-the-clock.  Some seniors also prefer a live-in caregiver to assist with household tasks they can no longer easily do and assist with meal preparation and managing appointments along with being there for safety issues. Companion live-in caregivers receive a flat daily fee for their pay, receive a couple hours of down-time in the evenings and must be able to sleep at night.  They also receive meals (they may prepare the meal and share it with the senior or be provided their own food and sometimes go out to restaurants to eat with their senior client).  These caregivers do not receive over-time pay.  And this works for everyone.  As they are not doing a consistent task around-the-clock, it would not be possible to hold the caregiver accountable for a task in order to be monitored hourly and paid for over-time pay.

Instead, live-in senior caregivers are paid from $120 to $180 a day, on average, depending upon where in the country they are located.  This works for the caregiver and works for the senior. As the former owner of a senior care agency I never once had a live-in caregiver ask for over-time pay.  Instead they loved their jobs and would actually recruit additional people to apply for the live-in caregiver jobs when a new case started.  There can be so many benefits of working as a live-in caregiver beyond the pay and the pay is considered extremely fair as the add-on benefits are many.  For instance, the caregiver may be enjoying staying in a gorgeous home and benefiting from sharing in all of the senior's activities.  

Did you ever see the movie "The Holiday"?  The actress Kate Winslet assists the senior neighbor with finding his way home and then assists with more tasks and ends up having him invite her to escort him to the Oscar's (or something really similar to the Oscar's - you know, great dress, limo, he is given an award for his career in the movie business).  Certainly not every single live-in senior client takes their caregiver to the Oscar's with them but working as a live-in caregiver comes with many perks along with the benefit of having a senior share a lifetime of wisdom.  Experienced live-in caregivers love their work and their pay, as it does work out to be a fair wage.  Realize that two caregivers rotate to provide live-in care for a senior client - earning a full week's pay in a few days and only needing to commute back and forth once each week, not daily, which also saves time and money for the caregiver.  When I owned a senior home care agency we would even have to work with the seniors at the holidays because they would sometimes prefer to be with the caregivers over their family and even schedule a double Thanksgiving or Christmas meal so they could have a holiday with the caregiver.  Live-in caregiving really does have many advantages and with the fair flat daily-pay rate, it pays the caregiver well and is affordable for the senior.

Compare In-Home Live-in Care to Nursing Home Care (1-on-1 Care vs. 1 C.N.A. to 15 Residents)

Live-in caregivers assist seniors in their own home and provide one caregiver dedicated to one senior.  Compare this to a nursing home where most nursing homes staff 1 Certified Nursing Aide (C.N.A.) to every 12 to 15 residents with 15 being most common (staffing ratios are available in the Caregiverlist Nursing Home Directory and provided through the health inspection reports).

Live-in Senior Home Care Costs per Day (which include all payroll taxes, insurances and necessary management):  $180 to $250 per day

Nursing Home Daily Costs:  $200 to $400 per day - - take a look at the actual nursing home daily costs in Caregiverlist's nursing home directory to see that on average the costs will be $250 per day and that is sharing 1 C.N.A. with at least 10 to 15 other nursing home residents.

The one-on-one care needs of seniors in nursing homes is such an issue that many nursing homes will tell a senior's family they must privately hire an additional caregiver if they want the senior to participate in activities and have a full slate of services as the 1 C.N.A. simply will not have time to provide the quality care they are seeking.  The home care agency I owned, for instance, in downtown Chicago, regularly provided private caregivers to be hired for residents of Warren-Barr nursing home in downtown Chicago. When a C.N.A. is caring for more than 10 seniors, as you can imagine, if one senior has a bathroom accident or another incident, that senior can take up all of the C.N.A.'s time and the other residents will have to wait for the next shift for any additional care needs.

The companionship exemption allows seniors to stay in their own home for around $200 per day and have one-on-one care services - - - that is much better than paying what would work out to be $400+ per day with over-time pay.  I'll stay away from that math calculation but it is killer when you add in the hourly fees for worker's compensation, payroll taxes, etc.  The flat daily fee works for everyone and includes payroll taxes and benefits.  The senior can afford it.  They most likely can't afford $350 or more per day to pay over-time pay while a caregiver sleeps at night.

The companionship exemption makes sense.

Apparently there may be some government care programs somewhere that do not pay minimum wage and overtime and if that is the case then the government should fix that.  But private duty senior care companies do follow employment laws and pay well over minimum wage, provide training and over-time pay.

Professional caregivers are paid on average $10 per hour as you can see in the Caregiverlist Employment Index. Caregiverlist has more than 1,000 professional caregivers apply for professional caregiving jobs each week and they tell us how much they are being paid.  In addition, the thousands of senior care agencies who subscribe to our hiring platform share with us what they pay their caregiver workers (and our founders owned senior home care agencies). 

The Supreme Court upheld the Companionship Exemption from overtime pay when Evelyn Coke, a 73-year-old retiree who worked for more than 20 years as a home-care provider sued Long Island Care at Home because she was not paid overtime for her long hours and overnight care.  I wonder why she accepted the assignments if she didn't like the pay and why she didn't stop at 40 hours a week, but anyway, she sued and her team of lawyers argued the exemption was not what lawmakers intended.  The Supreme Court did not agree with her lawyers and upheld the companionship overtime exemption.

Review Frequently Asked Questions about the Companionship Services Exemption from Overtime directly from the Department of Labor.

Home Instead and Right at Home are two large senior home care companies with multiple franchise locations nationwide.  Both companies are headquartered in Omaha, Nebraska and as major stakeholders in providing quality senior care their Nebraska state representative, Rep. Lee Terry, introduced legislation to block the Department of Labor from removing the care worker exemption.  This legislation is called the "Companionship Exemption Protection Act" and is S.3280 (112th): Companionship Exemption Protection Act if you would like to follow this bill which is on deck to be heard by 

You may review the Companionship Exemption Act (always fun to read the legal documents) and right now this bill is waiting to be heard by a committee - we'll update you when firm dates are announced (the news is that this will be delayed while the more important issues, such as an operating budget are being hashed out by Congress).  

Remember that while it is fun to poke fun at the inefficiencies of government, it is important to be grateful our voices can be heard in the U.S.A. so let your Congressman know your stand on this bill.  

Caregivers and seniors may find their Congressmen and Congresswomen along with their contact information to make your voice heard.

Caregiving jobs remain plentiful - for both hourly and live-in caregivers.  Apply to a professonal senior caregiver job on Caregiverlist or refer-a-friend to a caregiving job and be entered for the chance to win $50.  More quality caregiver workers are always needed to deliver quality care to the growing number of aging seniors.


Add comment