Local home care providers are worried a recent federal ruling may hamper their ability to help some of the region’s most vulnerable elderly residents to continue living in the comfort of their own homes.

Last week, the U.S. Department of Labor announced it was reversing a long-standing policy, and as of Jan. 1 it will require both public and private home care providers to pay their employees minimum wage for every hour they spend with their clients and overtime if they work more than 40 hours a week.

“For clients that need 24-hour care, this means they’re either going to have to pay more for our services or they’re going to be forced out of their homes,” said Todd Sensenbach, owner of Bend’s Home Instead Senior Care franchise, one of several private at-home care providers in Central Oregon.

Mike McCormick, the director of Oregon’s Aging and People with Disabilities Division, said the ruling would also ripple through the state’s home care system as well. He said the division plans to spend the next few months analyzing how this change will affect its home care program and won’t be able to provide any specific details until that review is completed.

“We’re either going to continue going as is or we’re going to have to modify our program’s policies,” McCormick said.

The system

Private home-care workers like the ones who work for Home Instead help their elderly and disabled clients keep track of medications, get dressed, bathe, prepare meals and perform other activities of daily living that let them stay at home rather than move into a long-term care facility or rely on children or other family members for help.

Sensenbach said that while most of his clients only need a caregiver to work with them for a few hours each day, about 10 percent of them need a 24-hour caregiver who stays in the client’s home at night.

McCormick said about 1,100 of the 12,000 people in Oregon who have a state-supported home care worker need this level of care. These caregivers are paid through the Oregon Health Plan, though some of the agency’s clients may need to make a co-payment, and managed by the Oregon Home Care Commission.

Since 1975, the department of labor has considered these 24-hour caregivers and other live-in domestic workers to be exempt from the Fair Labor Standards Act’s minimum wage and overtime protection rules because of the nature of their jobs and an assumption that they are not actually working with their clients every hour of the day.

Sensenbach said this exemption has allowed his company to pay 24-hour caregivers $21.50 for every hour they are actively helping their clients. It does not pay them for any time they spend sleeping — so long as they get five or six hours of uninterrupted rest — or time they are not helping their clients, even though they are considered to be on-call and must stay with the client at all hours of the day.

Most private at-home care providers in Central Oregon offer their employees a similar wage and pay arrangement, Sensenbach said.

Under the terms of its current contact with SEIU Local 503, McCormick said, the Oregon Home Care Commission pays its 24-hour home care workers $10.20 an hour for any time they are actively working with their clients and $4.55 an hour for the time they are considered to be on call.

McCormick said these pay rates are scheduled to increase to $13.75 an hour and $6.55 an hour, respectively, by Jan. 1, 2015, under the terms of a contract the two parties negotiated earlier this month that is still pending the union’s final ratification.

But this system doesn’t work for everybody.

According to the U.S. Department of Labor, the country’s 1.9 million home care workers rank as the service industry’s lowest paid employees even though they are sometimes performing tasks previously reserved for nurses, such as administering medications, wound care and other procedures. The department found 90 percent of these workers are women and 60 percent are minorities.

The changes

Under the new policy, third-party agencies like Home Instead and the Oregon Home Care Commission must pay their 24-hour employees at least $8.95 an hour — the state’s current minimum wage — for every hour they spend with their clients, whether they are actively working or not.

These agencies, which, according to the department, employ almost all of the country’s home care workers, would also have to pay their employees overtime rates for every hour over 40 hours they work each week. This means 24-hour caregivers would qualify for overtime after just two days on the job.

“Today we are taking an important step toward guaranteeing that these professionals receive the wage protections they deserve while protecting the rights of individuals to live at home,” Labor Secretary Thomas Perez said in a press release announcing the change.

But Sensenbach, who called the department of labor’s new policy “unfortunate” and “short-sighted,” said the exact opposite will happen.

Sensenbach said Home Instead’s employees currently earn $260 for every 24-hour shift they work. This costs his company’s 24-hour care recipients about $8,000 a month, which is about what they’d pay if they stayed at a nursing home or another long-term care facility in the area.

Sensenbach said he’d have to charge his clients nearly twice as much, or about $15,480 a month, once the new policy went into effect if he kept his employees’ wages the same and didn’t fundamentally change how they were paid.

He said that with this increased cost, most of his 24-hour care recipients won’t be able to get the care they need and stay in their own homes — a priority for the country’s aging seniors and baby boomers.

Though he wouldn’t speculate about an actual price tag, McCormick said he expects the department of labor’s new policy will have a significant fiscal impact on his program as well. Earlier estimates from his agency found the pay increases called for in the union’s pending contract — $3.55 an hour for active time and $2 an hour for inactive time — would cost the state $115 million over the next two budget cycles.

McCormick said he’d need to increase the inactive rate another $2.45 just to keep it in line with the state’s current minimum wage. He wasn’t sure if the state could just arbitrarily do this or if making the change meant it would have to renegotiate its contract with Local 503.

McCormick also wasn’t sure how the change would affect his agency’s ability to schedule home care workers who work for more than one client.

In some cases, he said, one caregiver will spend three hours a day with one client, three hours with another client and three hours with a third client over the course of five days. Even though these caregivers are helping three different clients — essentially working three different jobs — he said the state may have to pay them overtime under the new policy because they are working more than 40 hours a week and have a single employer of record.

“We have 15 months to figure this out,” he said.