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The Impact of DOL Overtime Rule on Home Healthcare Employers

Posted on: July 13, 2016 by titan-goodrich

In May, the U.S. Department of Labor announced new rules designed to protect employees’ interests in regard to overtime compensation. If you’re in the Virginia Home Healthcare industry, the impact of DOL overtime rule could be significant.

The most significant change you should be aware of is an increase in salary a worker needs to earn to be exempt from overtime payments. Currently, employees earning $455/week ($23,660/year) are exempt from overtime compensation. Starting December 1, when the rule goes into effect, employees will need to earn $913/week ($47,476/year) before they are exempt from overtime compensation. Additionally, beginning December 1, an employee will need to earn $134,004 to be considered a “highly compensated employee” – a $34,004 increase from the current threshold.

Big Decisions Ahead

Employers in all industries are grappling with how best to comply with the new rules. Considering that many home healthcare employees work more than 40 hours per week, home healthcare employers will need to weigh their options. Essentially, these options include:

  • Hiring more home healthcare employees to ensure that employees are not required to work more than 40 hours per week.
  • Auditing current employees’ workloads and consider reallocating shifts to ensure that no one is working more than 40 hours per week.
  • Increasing workers’ pay significantly  to $913/week ($47,476/year) so they are exempt from overtime.

Employers who choose these approaches should be aware, however, that the new overtime rules also state that the overtime salary threshold will be updated every 3 years. In other words, there will be an increase of employees that are entitled to overtime throughout the year.

In the coming months, you’ll likely be taking a close look at your business as you decide how best to address the new overtime rules. That’s also a great opportunity to review your insurance policy to ensure it is as comprehensive as it should be. We can help with this. Contact us at Goodrich & Watson today.

Posted in: announcement blog Business Insurance Home Healthcare News

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