Local companies in the home health care industry say new federal rules extending minimum wage and overtime pay to their workers will have the most impact when it comes to how many hours aides can care for clients.
Company representatives said some employees' hours may be cut or clients may pay more to keep the same aide as many hours. The companies said local franchises already pay more than the minimum wage.
The Obama administration made the changes Tuesday by removing an exemption to federal wage laws that had been in place since 1974. The rules cover home health aides, personal care aides and certified nursing assistants who provide care to the elderly and people with injuries, illnesses and disabilities.
The new rules will continue to exempt from minimum wage and overtime requirements workers who mainly visit the elderly to provide company or engage in hobbies and are employed directly by the person or family receiving services.
Labor unions and worker advocacy groups have been seeking the change for years, arguing that nearly half of caregivers live at or below the poverty level.
“It's in the right place of mind. I get why they want it, but all it's going to do is drive the industry costs up,” said Dustin Distefano, CEO of A Place at Home. “I think it has its advantages for our workers, but it has disadvantages for our seniors.”
A Place at Home employs about 40 caregivers, and the company recently expanded its services to Fremont, Wahoo and Blair. Starting pay is $9.50 per hour, Distefano said, but employees are not paid overtime.
Distefano said live-in caregivers like those he employs are a cheaper alternative to providing 24-hour care via a nursing home or similar facility. Most of A Place at Home's clients, especially those with Alzheimer's disease or dementia, prefer one caregiver. But Distefano said the new requirements may force the company to cut employee hours and put multiple caregivers in one home.
Omaha-based Right at Home's CEO Brian Petranick agreed. “Ultimately our clients and our families will have some increased costs in their care just because we as business owners now have more costs that need to be paid,” he said.
However, Petranick said many of Right at Home's franchisees, located in more than 40 states, are already operating under the new rules due to varying state laws or because they've chosen to.
“This is not a shock ... to our franchise system. We've been preparing our franchise owners for this and many of our offices already operate away from the exemption,” he said.
In Omaha, Right at Home starts home health workers between $9.50 and $10.50. The local office also pays all employees for overtime.
Home Instead Senior Care, also based in Omaha, has locations in all 50 states and 17 countries. Locally, the company's starting pay is $9 to $11 per hour with no overtime paid. However, public relations manager Dan Wieberg said the Omaha office plans to implement the overtime policy in January 2014 rather than waiting until January 2015, when the new rules take effect.
“Home Instead Senior Care's priority always has been providing high-quality, affordable services to seniors. We believe the new rules may create some challenges for some clients and their families; however, we will continue to provide much-needed home care services to those we serve,” CEO Roger Baumgart said in a statement.
Dan Wieberg said employee pay will vary greatly from state to state. “From Omaha, we don't set the wages for anybody, but the bottom line is our franchise owners comply with the law,” he said.
This report includes material from the Associated Press.