Overtime pay: What are the rules for paying an independent caregiver?


Many people who employ in-home caregivers think of them like teenage babysitters: You agree on a price (perhaps $40 for the evening), and when you return home a few hours later, you slip them the cash and send them on their way. You likely don’t bother to report the payment to the IRS.

Although in-home caregivers have been historically treated like babysitters, recently enacted federal regulations have clarified that they have little in common with babysitters and cannot be treated as such. Home healthcare aides are, for legal classification purposes, domestic service workers who must be paid an hourly wage for all of the hours they’re providing services to your loved one. They must be paid the minimum wage, and if they work longer than 40 hours a week, you are required to pay them overtime.

Homecare agencies typically handle these technicalities for their clients and employees, but if a family decides to hire an independent caregiver, then they are responsible for making sure that these laws are correctly observed. Although hiring a private individual who has no connection to an agency is thought to be less expensive, there are some very important factors that you must take into consideration as an employer.

Tafa Jefferson, CEO of Amada Senior Care, breaks down some of the key rules and regulations that determine when your independent aide qualifies for overtime:

Does your caregiver qualify legally as a domestic service worker?

As Tafa explained, the fundamental first question is critically important, but not always clear. “Only a home that is legally deemed a private home can employ a domestic service worker as a caregiver,” he said. For example, was your loved one living in the place where he or she is now receiving care? If not, the place is probably not legally a private home. What happens if your loved one does not live alone? If it’s a group setting, it may not legally be a private home.

Does your caregiver work 40 hours a week?

Although we might not think of a caregiver as being on the clock whenever they are in the home with your loved one, the law makes it clear that in most cases, they are working and must be compensated like any non-exempt worker. That means they must earn a minimum wage and be paid overtime when they qualify for it. Thus, it’s critically important to keep track of all hours on a written timesheet and account for meal and sleep breaks when the caregiver is legally not entitled to compensation.

Does your caregiver stay overnight or through meal breaks?

Caregivers often spend considerable time in a home, and they typically are so self-sufficient that they can take care of fitting their own meals and rest breaks into the care services they provide. Tafa explained that, as an employer, “you are obligated to keep track of these breaks in writing because it affects the hours they are considered to be working and entitled to compensation.” If your caregiver takes breaks to eat meals on the premises or to sleep on the premises, you must document when they do this and give them adequate time to have a bona fide break from work. If a caregiver’s services are needed while they are supposed to be on a break period, and they must interrupt this break period to perform duties, this time can no longer legally be considered a break—and the caregiver is entitled to compensation for the duration of what was intended to be a break period, even if overtime pay is triggered.

Is your caregiver primarily a companion?

One of the most common exemptions that can be used to preclude in-home workers from minimum-wage and overtime eligibility is the “companionship services” exemption. Individuals whose primary job is to provide fellowship and protection to an elderly or sick person fall under this exemption, as long as they spend at least 80% of their time serving as a companion and no more than 20% of their time providing any kind of “care” services. Once this threshold is crossed, the worker is legally reclassified as a domestic service worker and must be compensated at least the minimum wage, plus overtime as necessary.

In many situations, it’s not always easy or realistic to understand when to pay overtime to a caregiver. But, it is your job as a private employer to determine whether your caregiver qualifies legally as a domestic service worker, to keep track of hours worked, to understand what constitutes a bona fide break, and to distinguish between an in-home companion and a true caregiver. If you feel unsure about taking on all of these responsibilities on your own, you can turn to the services of a professional home care agency.

Do you know the overtime pay laws and regulations for independent caregivers? It's worth double checking to make sure you aren't breaking any rules.

This article was originally published on agingcare.com. It has republished here with permission.


About Author

I am the Founder of Stage Marketing and specialize in healthcare marketing. My doctorate is in communication, which means that I draw from the areas of psychology, sociology, and the humanities to understand the emotional and spiritual side of health.

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