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Department of Labor Rules on when Workers from Home Care Registries are Employees

Posted on Monday, July 23, 2018 12:13 PM

The United States Department of Labor Wage and Hour Division released a memo last week stating that workers from home care registries be considered independent contractors except for specific circumstances. 

Home care registries typically match elderly and disabled patients with caregivers, but the registries exit the transaction there, providing no other services of their own. ”Instead,” reads the memo, “a registry typically provides matchmaking and referral services to the client by providing access to its database of qualified, pre-screened, and vetted caregivers. A registry may confirm caregiver credentials, conduct background checks, contact professional references, and engage in other quality-control measures. A registry also typically obtains information from the caregivers about the type of work they are willing to perform, their target compensation, their availability, and other personal preferences when working with clients.”

During the Obama Administration the workers found through registries were considered employees of the registries themselves, therefore subject to overtime and minimum wage laws.  However, this was withdrawn after the Trump Inauguration.

The July memo reverses the Obama-era ruling “Whether an employment relationship exists under the FLSA depends on the “economic reality” of the circumstances,” reads the memo. “No single fact about the relationship may conclusively determine whether an employment relationship exists between a registry and a caregiver. Courts have provided several relevant considerations, including whether the potential employer determines the rate and method of payment, whether the potential employer has the power to hire and fire the worker, and whether the potential employer controls the worker’s schedule or conditions of employment.”

The memo explains the conditions under which a registry home care worker could be considered an employee of the registry, including: hiring and firing employee, scheduling and assigning work, controlling the caregiver’s work, setting the pay rate, receiving continuous payments for caregiver services, paying wages, tracking caregiver hours, purchasing equipment and supplies and receiving EINs and 1090s.

It is normal for registries to perform background checks but that is not enough to indicate that the registry is the employer of the caregiver.

Source: NAHC Report

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