Even before COVID-19 upended modern life, the 2020 U.S. presidential election was set to be a divisive one. Now, global changes are picking up speed and all business sectors are struggling to react, especially those in positions to be hit the hardest by a pandemic, such as healthcare. As a result, if you manage a home care registry, you should start preparing for an uncertain future.
The winner of the election will determine how this business model continues to operate, and now COVID-19 is combining shortages of vital supplies with increasing demand as more elderly patients stay home. Registries do offer many advantages over home care agencies, from pricing flexibility to continuity of care, but the challenges of COVID-19 plus the shifting focus on worker misclassification are placing an obvious strain on this healthcare model.
So, what can home care registries do to reduce the severity of these impacts? Possible solutions do exist, but to fully understand how to handle this unsure future, we need to look first at the past.
Bulletins, audits, misclassification and more
The 2015 update to the Fair Labor Standards Act (FLSA) by the U.S. Department of Labor (DOL) was intended for home care “employees,” but many registry owners quickly realized the DOL was targeting them with audits to determine whether independent contractors were being misclassified, a situation that can result in hefty fines or even worse penalties for you and your business.
“We were definitely hearing horror stories,” said Joel Chaffins, managing partner of No Place Like HomeCare LLC, headquartered in Seminole, Florida. “It wouldn’t have just been, ‘Pay a fine and do better.’ It would have been, ‘Close down your office.’”
But the real problem with the updated FLSA was that it did not provide clear guidance on what was required to differentiate between you and the independent workers you contract with. Maintaining this separation is important for protecting not only your business but also the freedom contracted caregivers value—and, thanks to more recent government guidance, there are now steps you can take to safeguard your business and their independence.
Taking steps toward a better model
A 2018 DOL Field Assistance Bulletin (FAB) outlined specific methods for determining whether you’re treating contracted caregivers as employees. This process provides 10 criteria that help reduce your misclassification exposure, but they’re notoriously difficult to implement.
As the election approaches and COVID-19 continues to spread, these will only become more important, so here are a few general topics to brush up on before discussing these criteria with legal counsel:
- Avoiding caregiver control: You probably know it’s wise to avoid hiring and firing, scheduling and assigning jobs, and directly controlling a caregiver’s work. But how does that reconcile with the realities of day-to-day operations, particularly during a global pandemic? Avoiding direct control remains important, even during an international emergency with a shifting backdrop of post-election legal requirements. First, discuss this issue with your legal counsel. Then you can begin to formulate a path forward by outlining new best practices and the tools you’ll need to implement them.
- Don’t supply equipment: During emergencies such as the current situation, medical supplies are often in high demand. Such is the case now, and manufacturers are struggling to keep up. Nonetheless, according to government guidelines, you should avoid providing equipment directly to caregivers, even if they need it. This includes simple items like face masks and hand sanitizer. If you have partners that offer discounts on these supplies, however, it may be permissible to provide this information to caregivers. Again, consult your legal counsel.
- The problem of pay: As a registry, you should not set a caregiver’s pay rate or receive continuous payments for caregiving services—only the initial fee for matching caregiver to client. You should also not pay wages directly using the registry’s own funds. One way to avoid this is to use a software solution to manage settlement processing and rate negotiation, which creates more separation between your business and contracted workers.
In times of chaos and change, implementing new best practices might be low on your priority list. But audits will not wait for you to adapt. That’s why discussing your options now with competent legal counsel is a good first step. Once you do that and establish what you need to move forward, you can begin acquiring the tools and technology to help you implement those best practices.
How to implement best practices
The model laid out by the current DOL guidance is complex, and the tumultuous history of these policies further illustrates the precarious position registries find themselves in. With regulations that could change at a moment’s notice—say, after a November election—having a reliable system in place for dealing with contracted caregivers is a must. The alternative is hiring caregivers as employees, which is costly and complicated. But implementing compliant processes, especially in highly regulated industries like home healthcare, means navigating dense technical and legal requirements. And that’s difficult at the best of times, let alone during an international crisis like COVID-19.
That’s where Openforce comes in, empowering you to effectively manage your independent contractor workforce. Our technology helps you implement practices that establish clear boundaries between you and contracted caregivers—and ensure you have all the paperwork you need when you need it.
“I sleep a lot better now,” Chaffins said about partnering with Openforce. “It’s all about growing the business and assisting our current clients with their needs in a more efficient manner … In our legislative and government climate, I just think it’s a no-brainer.”
Openforce is the leader in technology-driven services that reduce operating costs and mitigate risk for companies using independent contractors. Our cloud-based applications help companies and contractors alike achieve more sustainable, profitable growth by removing financial, operational, and compliance barriers to getting business done.