Tag: Department of Labor

The Positive Impact of New Wage Protections on Home Health Agency Bottom Lines

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In January 2016, the Department of Labor (DOL) officially extended federal wage protections to home care workers under the Fair Labor Standards Act, entitling them to the federal minimum wage, time-and-a-half pay for overtime, and pay for time spent traveling between clients. Predictably, lobbyist groups working on behalf of home care agencies have petitioned the Supreme Court to upend the new regulation. Their petition currently sits in limbo while the eight-member Court delays its’ consideration (presumably in fear of an unproductive 4-4 voting split while awaiting the confirmation of a ninth Justice). In the interim, those hoping for a review should consider the positive impacts of the new regulation and the opportunities it presents.

While on the surface this unfunded government mandate hurts home health agencies struggling to offer care within already slim Medicaid reimbursement margins, there is also a business case for increasing wages. First, increased wages will help entice new workers to the field, enabling agencies to care for more patients. Presently the median hourly wage for home care workers is $9.38[1], compared to the median for refuse collectors at $15.52 and parking enforcement workers at $16.99. While caregivers are often driven by a passion for their work, relatively low wages force many to look elsewhere. With higher pay, agencies should see an immediate impact on their ability to recruit new employees and increase revenue through improved bandwidth.

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