Certain employers of caregivers for people with disabilities will be given an extra 34 months to comply with the Obama Administration’s new overtime regulations, a move that comes in response to concerns from industry representatives that the rules could negatively impact the supply of providers for such services.
Currently, employers are only required to pay overtime for employees making less than $23,660, meaning they must pay time and a half for hours worked beyond the standard 40-hour workweek. Under new rules, first proposed in July 2015, the threshold will increase for the first time since 1975, more than doubling it to $47,476.
The American Network of Community Options and Resources, which represents more than 1,000 private home-health agencies, argues the regulations are not feasible if not coupled with expanded funding for caregivers from Medicaid, which provides the majority of the industry’s funding.
According to the results of a report released by the organization in March, 21 percent of surveyed providers indicated that the regulations would force them to cut services. Thirty-seven percent of those surveyed said they would likely have to lay off in-home care workers.
Under the final regulations, released May 18, the requirements will go into effect December 1 for most employers. The Department of Labor, however, simultaneously released a separate rule delaying enforcement of the rule until March 17, 2019 for Medicaid-funded caregivers for people with intellectual or developmental disabilities in residential homes and facilities with 15 or fewer beds.
“The non-enforcement policy will allow the Department to devote its time and resources to providing assistance to these providers of services at small community-based facilities, and will allow these employers time, if needed, to work with their state legislatures and (Department of Health and Human Services) on implementation of the Overtime Final Rule,” the DOL wrote in the Federal Register.
Until this past October, in-home care workers were completely exempt from the Fair Labor Standards Act’s overtime and minimum wage regulations, under the law’s so-called “babysitter exemption.” New Obama Administration’s regulations, however, interpreted the exception to only include caregivers hired by their care recipients and their families, as opposed to third-party employers.
The new $47,476 threshold is based on the “standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South,” according to a Department of Labor fact sheet accompanying the rule. The rate will be increased every three years, to keep up with wage growth.
According to the DOL’s estimates, more than four million people will receive new overtime protections under the rule.
“The 34-month delay in department enforcement for residential providers is an important recognition that the rule poses unique problems for our members who rely almost exclusively on Medicaid to provide services to some of our most vulnerable citizens,” ANCOR wrote in a news release. “While the delay is not a complete solution to the problem, the recognition of the issue in the rule is an important first step in our campaign to ensure Congress, the administration and state provide the necessary funding to extend the full benefits of the rule to the dedicated professionals who work every day to ensure people with disabilities have the opportunity to realize the promise of the Americans with Disabilities Act.”