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Employee Classification in Home Health Care: Wage and Hour Compliance

Any industry must use the right classification and wage and hour compliance. But, in healthcare, employers are under special scrutiny. To avoid costly fines and penalties, you have to get it right.

Back in 2019, the Department of Labor (DOL) increased the penalty for a single classification error to $2000 per offense. And that cost is before any taxes, fines, fees, or back wages. These are the classification, wage, and hour issues that can harm a home healthcare business most.

Misclassifying Employees as Contractors

Proper home health care employee classification is a must. While some employers are tempted to designate their workers as independent contractors as opposed to employees, there are strict rules about who can be considered a contractor. The IRS has a list of requirements to tell whether someone is an employee or a contractor. Many states also have additional laws.

Failing to Pay for Covered Activities

Home healthcare workers often travel to different locations during their work hours. As per federal law, the time spent driving from one client to another or from one facility to another is considered compensable. However, it’s important to note that the time spent traveling from home to the first worksite of the day is considered a commute and is not considered as part of the work hours.

Meetings and training are also considered as compensable time. As they involve time spent at work for the benefit of the employer, all nonexempt employees are entitled to compensation for the same.

Interrupting Breaks

Healthcare workers often talk about how hard it is to get break time. But, employers are required to make sure that employees aren’t doing work during unpaid breaks. Many states also have additional rules specifying how many breaks per shift must be taken.

Some companies auto-deduct time for rest and meal breaks during the day. But, you’ll have to be able to prove that those breaks were taken. Using a manual employee check-in and check out, and assuring adequate coverage, can help ensure that all employees are properly compensated for their time.

Retaliating Against Workers Who Bring Complaints

Employees have legal rights that are protected by the law. If an employee raises an issue and is retaliated against, the employer may face severe penalties. In most cases, it is more cost-effective for the employer to ensure that they follow pay-related laws instead of retaliating against the employee. It is illegal for employers to fire or retaliate against an employee for reporting a workplace violation.

Miscalculating Regular Rate of Pay for Overtime

Nonexempt employees are entitled to receive 1.5 times their regular rate of pay for every hour worked in excess of 40 hours in a week. The regular rate of pay excludes some types of compensation, such as discretionary bonuses or health insurance. However, shift differentials, hero pay, hazard pay, and on-call pay are all included and must be factored in to prevent any claims of unpaid overtime by employees.

Although the rules can be intricate, it is crucial to establish a system that values employee rights while keeping your business compliant. This will ultimately save you time and money in the long run.

Have questions about managing your home healthcare workforce? Consult with our payroll compliance experts at ASAP Payroll. We offer professional advice to help you navigate your specific circumstances. This helps ensure you stay in compliance and avoid surprises. Request a quote today.

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