The home-care sector is keeping an eye out for an expected move by the White House to make up to 5 million more people eligible for overtime pay. Some say it could benefit fee-based employees while others believe it could cause employers to scale back on hiring specialized workers.
A new rule from the Labor Department would more than double the threshold at which employers can avoid paying overtime, to $970 a week, by next year.
That would mean salaried employees earning less than $50,440 a year would be assured overtime pay if they work more than 40 hours a week.
Employers currently can bypass the rules by classifying a salaried employee who's paid more than $455 a week— or $23,660 a year—as a manager, giving them limited supervisory duties that make them ineligible for overtime.
Many nurses and therapists are paid on a per-visit basis, rather than hourly, said William Dombi, vice president of law at National Association for Home Care and Hospice, a Washington-based trade group that advocates for home care and hospice workers.
The NAHC is waiting to see how the overtime rule would affect them.
“The degree of impact would be nothing but speculation right now,” Dombi said.
Some nurses make lots of visits per week and put in more than 40 hours, but get paid the same because it's fee-based, he said.
Some home health companies pay the $455 base but do include add-ons for things such as shift differentials and specialized certification or degrees, and those companies will have to see if they can match the new proposal.
But the new overtime proposal could do some unintended harm, experts say.
If an adjustment is made to increase pay but no changes are made to the reimbursement payment schedule set by the CMS, nursing homes could see their workforce shrink, said Jeffrey Wellman, chief operating officer of the National Association of Health Care Assistants, a Joplin, Mo.-based trade group that represents certified nursing assistants.
To keep overtime numbers down, it's possible nursing homes would use staffing firms instead of employees, Wellman said.
The Obama administration's proposed changes will be open for public comment and finalized next year. The changes can be enacted through regulation without approval by the Republican-led Congress.
To keep up with future inflation and wage growth, the proposal will peg the salary threshold at the 40th percentile of income. The White House said 56% of those who would benefit in the first year are women, and 53% have a college degree.
Overtime rules cover less workers than they did 40 years ago, according to the White House. In 1975, overtime rules covered 65% of salaried workers. Today, it's only 8%, the White House said.