Home Care Rule Enforcement Begins
Today, businesses are increasingly outsourcing activities (and their costs) to other companies in an attempt to boost their bottom lines. This is done through, for example, the use of subcontractors, staffing agencies, labor brokers, franchising, licensing and third-party management.
A damaging consequence of these “fissured workplaces” is that employees are sometimes misclassified as independent contractors. Misclassification happens in many industries – affecting restaurant dishwashers, cable installers, home care workers and more. The jobs vary widely, but the harm done to workers and our economy is the same.
That’s because when employers misclassify their employees as independent contractors, often to cut their own labor costs, those workers are denied basic protections such as the right to earn at least the minimum wage and overtime, safety and health protections, Unemployment Insurance, workers’ compensation, and even guaranteed family and medical leave. Law-abiding employers lose out, too, when they can’t compete with other businesses that are getting ahead by skirting the law.
In the home care industry, the Department of Labor (DOL) updated the rules to guarantee minimum wage and overtime protections. They’ve done this because the workers who take care of our loved ones deserve fundamental wage guarantees, and because those who rely on their services deserve a stable and professional workforce that allows them to remain in their homes and communities.
Since the home care final rule was published more than two years ago, the DOL has made unprecedented efforts to help employers prepare for compliance. As of Jan. 1, 2016, the rule is being fully enforced and they are working to ensure that basic wage rights are guaranteed to those they are intended to protect. Employers should use care to ensure their workers are properly classified and that employees are paid at least the minimum wage and overtime.
To provide clarity for all employers, last summer the Department of Labor published guidance in the form of an administrator’s interpretation to explain what distinguishes an employee from a bona fide independent contractor. You need to have a clear understanding of the rules so you can follow them and avoid penalties.
Last year the California State Attorney General signed a cooperative agreement with the Department of Labor to help combat employee misclassification and wage theft.
In the home care industry, as in all industries, the blurring of employment relationships shifts risks onto the most vulnerable employees. But new business models should never operate at the expense of workers’ rights.
Source: Department of Labor | 2016 © Copyright Payroll Masters
Payroll Masters is not a licensed insurance broker or agent and does not provide professional or legal advice. This document has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please contact your employment attorney in connection with any fact-specific situation in which you intend to take significant employment action. Readers agree that they will hold Payroll Masters in indemnity and Payroll Masters assumes no liability. Payroll Masters is not engaged in rendering legal or accounting services. Therefore, Payroll Masters assumes no responsibility for claims arising from the use or implementation of the above information.