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Final Overtime Rule May Affect Home Care

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The US Department of Labor has issued the final overtime rule, effective December 1, 2016. The rule automatically extends overtime pay protections to over 4 million workers within its first year of implementation. The process of updating overtime regulations began with President Obama’s Presidential Memorandum in 2014, instructing the Department of Labor to look at way to modernize and simplify regulations, while ensuring that the Fair Labor Standards Act’s intended overtime protections are fully implemented.

The rule affects salaried workers, including some of those in home healthcare.

Essentially, the rule raises the salary threshold to $47,476 where workers will qualify for overtime pay. This is a significant increase over the current threshold of $23,660.

Workers above the threshold may still be eligible for overtime provided their duties are not executive, administrative or professional. Also, the rule does not affect hourly workers, as those employers are already required to pay overtime.

This rule also marks the first time the Labor Department will index future salary thresholds according to inflation, as every three years the threshold will rise to the 40th wage percentile for full-time salaried workers in the country’s lowest-wage region. Previously, lifting the salary threshold required the Department of Labor to propose a new regulation, which was often an arduous process.

Interestingly, some health care providers that rely predominantly on Medicaid funding will not be subject to the new overtime rule until March 2019.

Advocates have long argued that their limited funding will make the rule unfeasible, especially since they cannot raise rates to meet the added costs. This information is listed under the Non-Enforcement policy for providers of Medicaid-funded services for individuals with intellectual or developmental disabilities in residential homes and facilities with 15 or fewer beds.