What to Know About Employee Compensation Regulations in Home Health

By Team Hireology,
October 13, 2017

Home care agencies around the country had to rethink their scheduling and employee compensation plans when the U.S. Department of Labor determined in-home caregivers qualify as domestic service employees, meaning they’re covered under the Fair Labor Standards Act (FLSA).

As a result, employers are required to pay caregivers at least the federal minimum wage of $7.25 per hour, as well as overtime pay. In addition, each state has minimum wage laws, which ultimately factor into payroll management, compliance and many other HR processes.

Adding to the complexity is the joint employer rule. Under this regulation, both the agency and the person receiving care from the nursing home care worker qualify as an employer. In some cases the client will be the one paying the home care worker, while in others, the agency is responsible. Regardless, the agency always has to conform to FLSA regulations for fair pay and overtime.

The FLSA requires agencies to keep detailed records of employee identification, hours worked and wages earned. To efficiently track this data and comply with FLSA regulations, home health agencies can partner with a talent management system. Such technology enables home health agencies to track time and attendance and flags when employees are approaching overtime, among other HR-related benefits.

Without a centralized talent management tool platform, home health agencies likely track time and attendance manually, which poses a risk for human error and noncompliance with FLSA regulations. Not following these regulations can open your agency up to costly lawsuits from employees who may allege that they have been underpaid or overworked.

Below are two examples where tracking time and attendance is critical:  

  • Live-in employees – In-home caregivers live with a client for more than 120 hours per week. The DOL stipulates 8 hours per night of sleep time can be excluded from hours paid. However, employers must pay for any interruption to their regular sleeping hours. And any time a caregiver gets less than 5 hours of sleep, the employer cannot deduct sleep time.
  • Companionship services – Home care workers who spend 20 percent of their working hours on personal care, and don’t perform any medical procedures or perform tasks for all members of the household are exempted from receiving pay from the client. If this is the case, the home health agency is responsible for paying all employees at least federal minimum wage and overtime.

How to Reduce Hassles, Minimize Risks

Don’t make your agency vulnerable to legal hassles that can cost you time and money. Instead, partner with a talent management provider that can help you manage all HR processes through a single, centralized platform, including:

  • Time and Attendance Management
    A talent management system allows you to manage attendance, schedules, labor allocations and other components of your time and attendance workflow. You can receive automated notifications of overtime expenses and any paid time off for individual caregivers. This gives you the chance to get a better grasp on labor and find ways to keep costs under control while maintaining compliance.
  • Payroll Efficiency
    Integrated payroll and talent management saves your home health agency time, decreases errors, and drive more value. Comprehensive payroll-related data helps you eliminate manual data entry and reduce mistakes. Ultimately, automating payroll and other processes will save your agency time and ensure you’re complying with FLSA rules.
  • Compliance Support
    In addition to accurate payroll, time and attendance and record keeping, talent management software assists home healthcare agencies with compliance by tracking state and federal requirements, including those stipulated by the Affordable Care Act, FLSA, Equal Employment Opportunities Commission and other regulatory agencies.

It can be overwhelming stay on top of the latest home care employee regulations. Rather than tasking your human resources department with tracking each and every compliance regulation, you can partner with a talent management solution, which provides all the tracking and tools you need to stay compliant.

Interested in learning more about how Hireology can help your home health agency maintain compliance? Read about our talent management solution and schedule a demo today.


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