Payment of caregivers: new law goes into effect Oct. 13

See additional update on this topic posted March 21, 2016.

Effective Oct. 13, 2015, the current overtime exemption for home health aides (HHAs) and certified nurse assistants (CNAs) is eliminated. Caregivers who work more than 40 hours per week must now be paid overtime. Any live-in caregiver must be paid at least minimum wage, $8.05/hour in Florida, plus time-and-a-half for all hours worked over 40 per week. (The new rule had been slated to go into effect earlier this year but was opposed by industry groups. On Oct. 6 the Supreme Court denied their request to further delay implementation.)

The new law has enormous practical implications, particularly as it relates to those who employ live-in caregivers. Issues to be considered now include:

• Will the new law apply to you even if you have a private caregiver in place? If you do not pay your caregiver in conformity with the new rule, could you be sued for violation of labor laws, and required to pay overtime, as well as pay attorney's fees for your caregiver's lawyer?

• Do not assume that you can ignore the law if you consider the caregiver to be an independent contractor and not an employee. Even if you think you'll never get caught, it's wrong, first and foremost. Secondly,  what happens if the person quits or is fired? All bets about your "private agreement" could be off. It doesn't matter even if you have a written contract in which the caregiver and you agree that he/she is an independent contractor. The law will define what the caregiver's role is, notwithstanding your agreement.

• Are all health care agencies affected, and what will the new rates be? Many people use nursing registries for their caregiving needs, rather than home health agencies. Although you may pay a registry directly, most registries take the position that they are acting as a placement service, and that you are the actual employer. That means you will have to comply with the new rules for minimum wage and overtime pay. Therefore it may be preferable to use a home health services agency, in lieu of a registry. At a minimum, speak with a labor lawyer to determine if your private arrangements with the caregiver comply with the new law.

• Lastly, it is obvious that this legislation will increase what you pay for caregiver services. If you have avoided applying for long-term care insurance because of the expense, and because you've assumed you can pay an unlicensed caregiver less, you may want to rethink that strategy now.

Many thanks to Scott Greenberg and Jacky Purje of ComForcare Senior Services in Palm Beach Gardens, Florida, for their input in this post.