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What 24/7 Care Should Cost in California?

Posted on June 2, 2016 with 0 comments

123 Home Care’s mission is to be the best and most trusted non-medical home care company in the industry by delivering the highest quality of care in the easiest and most convenient way possible. In order to execute on this lofty mission, we MUST be transparent and honest to our clients. This means informing our clients and our referral sources about what the cost of care is and doing so within legal (and moral) guidelines. Unfortunately there are many home care agencies who are guilty of either quoting incorrect prices in order to win-over referral sources and new clients (the old bait and switch) and/or providing services under outdated laws thereby not paying the legally obligated wages to their employees! Let me explain ;).

Removal of Personal Attendant Overtime Exemption

On January 1st, 2014 the Personal Attendant Overtime Exemption was removed. Prior to this change, under Wage Order 15, Personal Attendants (i.e. caregivers) were not paid overtime for hours worked more than 8 hours in a day or more than 40 hours in a week. The removal of this exemption meant that Caregivers began to accrue overtime on a daily basis after 9 hours worked (8 hours in facility) and 40 hours in a week. This increased the cost of care for most cases, however Live-in Care rules still applied, but not for long.

“Live-In Care” is Currently Unlawful in California

On February 1st, 2015 the California Supreme Court rendered 24 Hour “Live-in” Care unlawful via the Mendiola Decision. Prior to this decision, 8 hours for sleep/rest periods could be deducted during a successive 24 hour period of care (i.e. 24 hour “live-in” shifts = the cost of 16 hours of care). Accordingly, “Live-in” caregivers must now be paid for ALL (24 hours) hours present in the home (including applicable overtime, remember the removal of the Personal Attendant Overtime Exemption occurred on January 1st). “Live-in” care went from costing ~$250 to $450-$550 per day (depending on the rotation of caregivers and overtime – more on this below).

24/7 Cost of Care Floor

On January 1st 2016, California’s minimum wage rose to $10/hour from the previous $9/hour floor. For simplicity, let’s assume an agency is paying their caregivers minimum wage (often caregivers are paid above minimum wage but this example is to highlight the floor of what 24/7 care will cost). Given that Live-in care is now unlawful (PLEASE NOTE: many agencies still provide Live-in care and quote Live-in prices, this is unlawful and we strongly recommend not using an agency that breaks labor laws as it opens-up you and your family to potential legal liability) there is no deduction for the 8 hour sleep/rest period. Let’s assume that an agency staffs a case with 2 different caregivers for 12 hour shifts (thereby providing better continuity of care than using 3 caregivers). Assuming approximately 30% burden for workers’ compensation and employer taxes, the cost of care floor would equate to ~$350 per day. This means that any agency quoting you less than $350 per day is likely breaking the law (by still employing the “Live-in” model or by paying their caregivers less than minimum wage, but either way, they are breaking labor laws and you shouldn’t employ them). Additionally, if you want the same 2 caregivers providing care for your loved-one throughout the week, on the 6th and 7th days of care, overtime will equate to a floor of $450 per day.

123 Home Care’s Approach to 24/7 Care

We believe in transparency and being lawful. We pay our caregivers the correct amounts and we quote the right prices to our clients. We pay our Qualified Caregivers according to labor laws and we do not employ the illegal Live-in model anymore. It’s our mission to be the best home care company in the industry and we aim to continuously improve every day to better serve our clients. Transparency is a vital component of achieving this goal.

Sincerely,
Gray Freeman
Chief Executive Officer
123 Home Care

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