In a recent post, we discussed the hazards, from a tax reporting perspective, of erroneously treating California caregivers as independent contractors as opposed to employees. If a caregiver is an employee (as is often the case), her employer also must comply with the various wage and hour rules that apply to the employment relationship.
Many elders and their families simply pay caregivers a straight hourly rate for 12 or 24 straight hours of work. This approach, though convenient, may set the stage for employment litigation against the elder. Below, we’ll discuss the two sets of rules that apply to California caregivers depending on the nature of their work – those who employ caregivers will need to pick the right set of rules and follow them.
In California, the Industrial Welfare Commission (“I.W.C.”) issues industry and occupation-wide wage orders that establish minimum wages, maximum hours of work, and standard working conditions for covered employees. Relevant here is I.W.C. Wage Order 15, governing wages, hours and working conditions for those employed in “household occupations,” which means “all services related to the care of persons or maintenance of a private household or its premises by an employee of a private householder.”
Also relevant is the Domestic Worker Bill of Rights, commencing at California Labor Code section 1450, which controls the wages, hours and working conditions of “personal attendants” employed in private households. Although originally scheduled to sunset on January 1, 2017, Governor Jerry Brown in September 2016 signed SB 1015, which eliminated the sunset date. According to the author, Senator Connie Leyva, SB 1015 “validates the important work of the over 300,000 domestic workers that serve as housekeepers, nannies, and caregivers in private homes in California.”
California I.W.C. Wage Order 15
Unless they are “personal attendants” (discussed below), Wage Order 15 sets for the rules governing in-home caregivers in California, which depend on whether the caregiver lives with the elder.
With respect to live-in caregivers, Wage Order 15 requires:
- The worker must be paid at least the state minimum wage rate for employment, which is currently $10.50 per hour.
- The worker must have 3 hours off (may be nonconsecutive) in a 12-hour span of work.
- The worker must have 12 consecutive hours off in a 24-hour workday, or be paid overtime for work during this period.
- The worker must have 24 consecutive hours off for every 5 days worked (except in an emergency).
- If the worker works more than 5 days in a workweek, he or she must be paid overtime on the sixth and seventh days, and double time for work in excess of 9 hours on those days.
For non-resident caregivers:
- The worker must be paid overtime for any work in excess of 8 hours in a workday or 40 hours in a workweek.
- The worker must be paid overtime for the first 8 hours on the seventh consecutive day, and double time for work over beyond 8 hours on the seventh consecutive day.
- The worker must be paid double time for work in excess of 12 hours in a workday.
In addition to providing overtime and double time pay as outlined above, employees covered by the wage order must be provided with meal and rest breaks at the following rates: one 10-minute rest break for every 4 hours worked or major fraction thereof, one 30-minute meal break for a work period of more than 5 hours, and a second 30-minute meal break for work in excess of 10 hours in a workday. There is an option to use “meal and lodging credits” to meet the minimum wage requirements under the Wage Order, but you should consult an attorney to get more information on this complex topic.
Personal Attendants Covered by the Domestic Worker Bill of Rights
Individuals who are “personal attendants” are not covered by the overtime and meal/rest break provisions of Wage Order 15. Instead, the Domestic Worker Bill of Rights contains the applicable provisions. A “personal attendant,” under California Labor Code section 1451(d), is: “any person employed by a private householder or by any third-party employer recognized in the health care industry to work in a private household, to supervise, feed, or dress a child, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision.”
However, an employee will not be considered a “personal attendant” if more than 20 percent of his or her time is spent performing “non-attendant” household duties, such as making beds, cooking, laundry, or other duties related to the maintenance of a private household or the premises.
The following rules apply (instead of Wage Order 15) to “personal attendants” subject to the Domestic Worker Bill of Rights:
- The worker must be paid at least the state minimum wage rate for employment ($10.50/hour).
- The worker must be paid overtime at one and one-half times the regular rate for all work performed in excess of 9 hours in a workday or 45 hours in a workweek.
Thus, if you hire a caregiver to work for an elder, you must determine whether the Domestic Worker Bill of Rights applies, and if so, pay him or her accordingly.
A Recipe for Litigation
As the above simplified discussion suggests, California’s laws and regulations governing the wages, hours and working conditions of personal attendants and other in-home caregivers are complex, and you may consider paying a caregiver a flat rate to avoid the hassle. We strongly caution against this approach.
A worker who is not paid properly for all hours worked can file a lawsuit against his or her employer (i.e., the aging parent you are assisting) to recover unpaid wages and overtime. A worker who prevails in such a lawsuit will recover damages in the form of unpaid regular and overtime wages, along with reasonable attorney’s fees, associated litigation costs, interest on the unpaid wages, and statutory penalties. This amount quickly can add up into the six figures for a single employee.
California employers, large and small, often face wage and hour lawsuits in today’s marketplace. The availability of attorney’s fee awards to prevailing employees means that even workers of modest means who cannot front litigation costs can find counsel to advocate for them. Thus, we are now also seeing wage and hour claims against elders who hired caregivers to help them remain in their homes. Typically, family members who employ caregivers to assist elders are unfamiliar with the requirements of being an employer, but ignorance is not a defense.
Simply put, wage and hour violations at Mom’s house can spark litigation as easily as violations in a commercial work environment. Wage and hour litigation against California elders is likely to increase given our aging population and what seems to be a growing number of lawyers specializing in bringing such claims.
Hiring a home care agency, while costly in the short term, will help families avoid the complexities of navigating California’s employment laws, and may end up saving money by avoiding costly litigation. If a family chooses to directly hire a caregiver, instead of working through an agency, the family will need to carefully handle tax issues, as well as wage and hour issues, and keep clear records of their compliance.