Council on Aging Answers 2015 - 42

COUNCIL ON AGING - ORANGE COUNTY

hEALThCARE

New Laws Transform Homecare
n Donald A. Irish
President, A Family home Care, Inc.
President, Orange County Chapter ABhC

Consumers hiring private caregivers are affected
much more than agencies because agencies generally
pay their caregivers more than minimum wage.

One of California's most vulnerable populations is
made up of seniors who, because of advanced age, injury, illness or disabilities, rely on caregivers to provide
home care services. These services improve the quality of seniors' daily lives, allowing them to stay in their
homes. According to a recent study by the American
Association of Retired Persons, "nearly 90% of people
over age 65 indicate they want to stay in their home for
as long as possible".
Home care agencies can provide in-home care caregivers to consumers, or consumers can hire caregivers
either privately or through registries which refer selfemployed caregivers. Home care agencies and consumers alike have traditionally been exempted by law from
paying overtime to the caregivers they employ. This has
allowed home care services to remain affordable.
Several new laws will NOW impact that affordability.

AB - 1217 Home Care Services Consumer Protection
Act (Jan. 1, 2015)
This bill provides for the licensure and regulation
of home care organizations. Home caregivers must be
registered with the yet-to-be created Home Care Aide
Registry.
This will impact home care aides and home care
organizations by imposing additional registration and
licensure requirements. These require time and money
to comply with, resulting in increased care costs to consumers.

AB 241 - Domestic Worker Bill of Rights
(Jan. 1, 2014) California home care agencies as well as
any consumer who hires caregivers must pay caregivers OT (overtime) after 9 hours worked per day and 45
hours worked per week.
(Jan. 1, 2015) Federal Law reduces the 45-hour
threshold for overtime to any hours over 40 per week.
Failure to comply invokes costly statutory penalties and
potential litigation to any non-compliant agencies or
consumer.
One significant consequence of this law is that the
cost of services can become more expensive with the
mandated OT rates. Agencies are reducing the hours
a caregiver can work to avoid OT cost for their clients.
Consumers are reducing services in order not to pay OT
or they are deciding to ignore the law.
AB 10 - Minimum Wage Law Change
(July 1, 2014) CA's minimum wage increases from
$8.00 to $9.00 per hour worked.
(Jan. 1, 2016) Minimum wage in CA increases to
$10.00 per hour worked.
42

Answers Guide 2015

What To Consider NOW When Hiring Home Care:
All caregivers hired by consumers must be paid at
least minimum wage for each hour worked.
n Each caregiver must be paid 1 1/2 times the hourly
pay rate (OT), for all hours over 9 hours per day and 45
hours per work week.
n According to the IRS and State Agencies, there
is NO such thing as a "1099 Independent Contractor
Caregiver." Either an agency or the consumer must be
the employer.
n If a consumer hires a caregiver privately or from a
registry, that consumer is the employer and legally has
the same employer responsibilities as an agency.
n If a consumer hires a caregiver privately, they are
responsible for workers' compensation insurance, withholding, reporting and paying all payroll taxes for the
caregiver.
The consensus among health care professionals based
on the new laws is that there appears to be little difference in the costs for consumers who hire caregivers privately or from a registry. Important factors in selecting
home care are:
n Determining if the consumer wants to take on the
responsibilities and liabilities of being an employer, OR
n Selecting an agency that legally employs the caregiver and carries the associated legal and financial responsibilities and protections for the consumer.

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Council on Aging Answers 2015

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