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The Challenge of Aging in Place: The Impact of Overtime Laws

Compiled and edited by Helene Bergman, ACSW, C-ASWCM

The theme of the recent White House Conference on Aging (July 2015) was Empowering Americans as We Age, and many initiatives — economic and otherwise — were proposed to better prepare workers for retirement, to support elder caregiving,  and to facilitate older Americans to age in place. For elders receiving one-on-one care at home or in a facility, a recent change to the Fair Labors Standards Act (FLSA) may in fact be adversely affecting caregivers and the ability of elders to finance long-term care in the community.

In order to protect the rights of domestic employees, the overtime rule, which requires time and a half be paid to those working over 40 hours weekly, went into effect in October 2015. A prior exemption for agencies offering companionship services was negated and, as a result, many home care agencies along with Aging Life Care Managers™ were impacted in ways that are still challenging their ability to provide affordable services for families and their loved ones who need care.

In order to explore how this has affected professionals from differing geographic areas, a cross section of experienced Aging Life Care Professionals™ (both care managers and home care providers) were asked, “How has the Employment Law affected your care management / home care practice?” They identified how these changes have had an important impact on the worker, the quality and cost of care sustaining a Home Care Agency business, and the role of the Aging Life Care Manager.  These factors considered together have led to concerns about premature institutionalization and the quality of life for elders who could otherwise remain at home.

Impact on the Worker

Nancy Avitabile, Aging Life Care Manager from New York and ALCA National Board Member, notes that many HHA employees have been seeking additional employment as their hours, and overall pay, have been reduced. One aide complained that her hourly rate was reduced from $13.00 per hour to $10.00 per hour.  Avitabile says, “We have heard of aides enrolling with one, or even two, additional agencies to make ends meet; each requiring them to attend orientations, routine in-service, and deal with different managers and agency culture. Workers complain of more travel time, juggling two work schedules, and less time to manage their own lives. The new standards seem to be leaving the HHAs with the short end of the stick.”

Jeff Friedman, Vice President of marketing for a home care agency in California, offers another perspective. He finds “employees working at different agencies…often going to the highest paying (which is also the highest cost) and most convenient for the employee. The demand is high and the supply is low, essentially giving the employee the influence at this point.”

Byron Cordes, an Aging Life Care Manager from Texas and a prior President of ALCA agrees, “Caregivers in the region have long worked 50-60 hours per week to gain a semi-reasonable income. Given the current law, employees can still get more than 40 hours of work but they simply have to piecemeal their hours together with several agencies.” Thus, they are running around from job to job.

Bunni Dybnis, a prior ALCA Board Member and principal of LivHOME, California, writes, “I think we can all agree that workers deserve to be compensated for the work they do and protected against injury and unjust labor practices.  Unfortunately, there is also the reality of what those in need of care can afford or are willing to pay for the luxury of safety and remaining at home.  In California, with costs for twenty-four hour care over double what is was in the recent past, even those with long-term care insurance are often left short when attempting to age in place.”

Impact on Quality & Cost of Care

Cordes notes that as agencies adhere to the law, many have raised their rates to cover employees who exceed the 40 hours; this obviously has put an increased financial burden on his elderly clients. Some have adjusted their calculations of how long their money will cover their care, and many have cut back on quantity of care, thereby decreasing their quality of life.  To illustrate, Cordes presents a case example:

Mrs. K had twenty-four hour care in her facility from a small group of consistent long-term caregivers/companions. When the law went into effect, the agency had to add more caregivers to the mix and raise the hourly rate; at the same time the facility noted problems in quality of care. Dealing with so many caregivers led to problems with shift changes, punctuality, and they even found Mrs. K without a caregiver one afternoon. The family decided to save the client’s diminishing funds and cancelled the caregivers entirely. The care manager worked with the facility to increase its attention to the client. Although they tried, Mrs. K lost her 1:1 care and her dedicated caregivers lost their employment.

Friedman offers an agency perspective, stating, “Because of the increased wages, overtime, etc., the cost to the person needing the care has increased exponentially…and these cost increases will continue as minimum wage will increase every year until approximately 2020. Many who need these services are essentially priced out of the market…” He further notes that “people who require 24-hour care will feel the changes the most, and that makes the law a health problem not just a labor issue. The folks who need the greatest amount of care are the most vulnerable individuals with the most acute health care problems. Switching from the one ‘live-in’ Friedman offers an agency perspective, stating, “Because of the increased wages, overtime, etc., the cost to the person needing the care has increased exponentially…and these cost increases will continue as minimum wage will increase every year until approximately 2020. Many who need these services are essentially priced out of the market…” He further notes that “people who require 24-hour care will feel the changes the most, and that makes the law a health problem not just a labor issue. The folks who need the greatest amount of care are the most vulnerable individuals with the most acute health care problems. Switching from the one ‘live-in.’

Amy O’Rourke, President-Elect of ALCA and an Aging Life Care Manager in Florida notes, “In Florida, we have been grappling with how to adjust our care in the home with the new labor laws. It has been difficult, because all of us want caregivers to earn a decent wage. We have had caregivers who have been working 50-60 hours per week and whose hours have had to be reduced because the family could not afford the overtime.  We have had to use multiple caregivers in the home, which has created stress for the families.” She further states, “We are still trying to figure out how to pay for health insurance for our full-time caregivers in addition to complying with the new labor laws. It should not be this expensive to help older adults stay at home. I have had more conversations with families who cannot afford the current rate of caregivers. If the rate goes up (which it most certainly will) I don’t know how the aging person will get the care they need. What I envision is premature institutionalization for the elder, which will be an expense borne by overstressed state budgets.”

The reduction in hours of long-term workers has had a devastating effect especially on cognitively impaired and/or medically complex clients. Avitabile has seen how these changes have jeopardized client care by interfering with continuity and functional working relationships. She has seen increased calls to Emergency Medical Services resulting from new aides assigned who were unfamiliar with a patient’s baseline functioning…or personality. “During a recent transition to agency care, our intelligent yet cognitively impaired client, receiving 24-hour sleep-in care, questioned the logic of sending in ‘so many new faces.’ He called his daughter with angry threats to fire each new aide and cancel all services—services that had been nurtured for over a year. Predictably, the daughter called the Aging Life Care Manager and demanded that the problem be fixed. The care manager ultimately negotiated for two workers, each working three days, and a single worker working for one day, for a total of three workers assigned to the case. Although this was an improvement to ‘seeing a new face every day,’ both the client and the aides yearned for a better outcome. Ideally, the case should have been staffed with two workers sharing the seven day week; however, this would have increased the agency overtime costs.”

Impact on Home Care Agencies

Can home care agencies stay in business? Or do they have to modify what they offer? Jack Herndon, the managing partner of a home care agency in Northern California, notes that many home care agencies have stopped offering live-in care, in large part due to the increased costs. Or, those who offer live-in care have seen a dramatic increase in their costs and almost all have raised their daily rates to clients as well. These two changes have prompted a number of clients to seek more guidance from Aging Life Care Managers to compare in-home care with residential care and in many cases moving an older adult prematurely.

Cordes notes, “… many of the agencies we work with have been scrambling to hire additional caregivers to fill an increased number of shifts; instead of two 12-hour shifts, they now have to fill three 8-hour shifts (or more). This requires working with multiple staffing coordinators who are now calling the better workers trying to fit them into a jigsaw puzzle with an ever-expanding number of pieces.”

O’Rourke further notes that the overtime cost has a multi-faceted catastrophic effect on continuity of care as well as sustaining a home care agency. She says “We have had caregivers working for multiple clients whose hours have had to be reduced because the total of hours worked is over the 40 hour limit. Clients who have been attached to certain caregivers have had to adjust to new staff members; there is no justification to pass on an overtime cost to the clients on a three or four hour shift. We are currently evaluating whether we should discontinue our three hour shift option as it creates overtime for some of our staff. As an agency, we have the added overhead of unemployment insurance, both federal and state workers compensation, and payroll taxes. Paying workers overtime is not a financially sustainable business model. Other agencies are expressing this same view to us. Some of our clients want the security of securing employees through an agency AND they want the continuity of staff as well.”

What about the Aging Life Care Manager?

According to the panel, the changes have wreaked havoc on the job of the Aging Life Care Manager. Avitabile notes having to disappoint the aides, “We have often had to explain to long-term valuable workers about the reduction to their days or hours. Clients ask us to limit the number of scheduled workers even as agencies request their permission to charge overtime, which is new to them.” She cites an example of an alert but cognitively impaired ninety-eight year old woman who had been receiving split-shift care. Prior to her death, she had six home health aides assigned to her care; two workers had been added and the schedule reorganized after November 2015. The HHA staff was upset with the Aging Life Care Manager as they (incorrectly) assumed we had changed their hours. Most upsetting was that the client could not remember the names of the recent hires and was negatively triggered by new HHAs. Not only was this scenario disruptive to the client, the family and the Aging Life Care Manager struggled with the complications of too many workers vying for extra work (and providing inconsistent services).

Herndon recommends that Aging Life Care Managers understand the changes so that they can ensure their clients are in compliance — whether the families are employing the care providers directly or working through an agency bound by these laws. Dybnis adds, “There have been seven different bills from both California and Federal law makers that have done away with live-in and long-shift waivers, increased overtime and minimum wage payments, added sick days, and reinforced other employer obligations in terms of employee’s designation.” Aging Life Care Managers do not want to recommend the services of a home care agency that is not complying with the state and federal laws.

What happens when all fails and funds are exhausted? Dybnis answers, “For the group who despite wanting to remain at home, but need 24/7 support — we have been assisting in finding appropriate placement.”

Possible Solutions?

Avitabile found a temporary solution:

As a viable alternative, we often use licensed registered employment agencies to provide skilled workers for interview and eventual direct employment by our clients. Because family/direct hire employers are allowed more flexibility with wages, overtime has been more manageable and it is unnecessary to divide long hours of work among many workers; direct-hire workers have been largely unaffected by the FLSA. In our experience, the workers earn better wages, while our families remain in full compliance with the FLSA rules. There is no third party involvement and the direct-hire employer is not required to pay for time when the worker is sleeping or taking a break (though provisions apply). Our clients experience a strong continuity of care and workers are able to focus on one job and one client. A reduction in the number of employees in the home and paying a living wage (with overtime) has been especially beneficial to our dementia patients, who thrive on continuity and consistency.

There is a way to comply with the new laws and continue to ensure the best care for our clients. We have found that direct-hire workers give us the loyalty, compassion, and expertise our families expect. Client satisfaction stays high, turnover is reduced, and our practice benefits as well. However, when we work with third party employers, we will continue to advocate for our clients to have the continuity and consistency that is always the hallmark of a high quality Aging Life Care practice.

O’Rourke agrees: “As an Aging Life Care Manager, we advise families on all of the ways they can secure caregivers for their parents; through agencies, privately, or through registries. I think the way the industry is going to go is in support of the private caregiver.”

Friedman believes that this approach is not without risk, “The unintended result is the exact opposite of the legitimizing intent of the law. What we’re seeing is a lot of ‘underground’ employment, hiring privately or through registries which increases the risks to the clients.”

The differing and similar points of view of the professionals interviewed in this article depicts the complexity of maintaining the idea presented at the White House Conference on Aging: that elders should be allowed to age in place, and we must make it affordable for all. Ironically, that is not happening as those from middle to lower socioeconomic groups are thrust forward into institutional living. While the overtime law has been rightfully designed to protect the worker, it has caused other inequities that may or may not be resolvable in the quest for all seniors to age in the comfort of their own home.

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