As if home care needs another stressor. Between inflation, gas prices and a historic workforce shortage, the industry is under a considerable amount of financial and operational pressure. The Department of Labor added a little more heat to the fire this week with a proposed rule that makes it easier to uncover misclassification of employees as independent contractors.
In a statement unveiling the measure published in the Federal Register, the department cited home care and personal services as sectors that frequently run afoul of the law.
“While independent contractors have an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors, particularly among our nation’s most vulnerable workers,” Secretary of Labor Marty Walsh said. “Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages.”
Essentially, the proposed rule seeks to overhaul a five-factor test that’s used to determine whether caregivers have been misclassified as employees under the Fair Labor Standards Act. The newly proposed rule would focus on the “economic reality” of the worker’s situation. It ultimately would ask, according to an email alert from the Polsinelli law firm: “Are they economically dependent upon the registry/entity sourcing the client for work (and therefore an employee) or are they in business for themselves (and therefore an independent contractor)?”
The law firm noted that rule would have the most significant impact in home care on registries, virtual marketplaces and other agencies operating under a consumer-directed service delivery model.
The Department of Labor already has shown it means business. It has recovered more than $9 million in back wages for 6,500 home care workers this year, according to a news report.
The proposed rule, if finalized, could up the ante. But it is not a done deal. The DOL is accepting comments on the proposed rule until Nov. 28 (hint, hint). Providers, it’s time to start writing.
Liza Berger is editor of McKnight’s Home Care. Email her at [email protected].