03.24.2022

Staffing Shortage Forces Overtime Scrutiny

Home health and hospice agencies scrambling to field workers under the pinch of a nationwide staffing shortage could be vulnerable to increased risk of wage and hour violations, SimiTree consultants warn.

“Scheduling has become much more challenging across the entirety of an agency, and particularly for home health aides or certified nursing assistants (CNAs)," said Laura Wilson, SimiTree's Director of Clinical Consulting. “Agencies often find themselves just trying to do the best they can with who they have available at the moment."

But failing to adequately anticipate the need for overtime and carefully track extra hours worked could prove costly, she said.

In two separate cases last month, the U.S. Department of Labor found overtime violations of the Fair Labor Standards Act. One involved a home health agency in Lubbock, Texas, and the other was a home care agency in West Columbia, S.C.

In Texas, Lubbock Essential Home Health Care Inc. was liable for $137,838 in recovered wages for 71 workers who were paid straight time for all hours worked instead of time-and-a-half overtime pay. Most of the Lubbock workers were home health aides.

In South Carolina, the Labor Department recovered $120, 321 in back wages for 31 workers at Attentive Angels Home Care. The agency operates third-party home care services, and the workers provided companionship and personal care.

“In both those cases, the agencies had to pay back wages and liquidated damages, or the amount of money that both parties had agreed upon in the contract as a legal consequence for breaching the contract," Wilson said.

“Fair Labor Standards Act litigation can be extremely costly, so it's important for agencies to do all they can to mitigate the risk," Wilson said. “We all know there are times during the staffing shortage when the crunch escalates, and agencies are just trying to get staff out the door to see patients. That's when it becomes more important than ever to track hours and stay on top of overtime worked."

Care vs. overtime cost

Reacting to last-minute staffing issues with diligence is important, but advance planning is even more essential to controlling overtime costs, Wilson said.

“Agencies are always trying to strike the right balance between delivering high quality care, maintaining continuity of care and minimizing their overtime costs," Wilson said. “That can be a delicate balancing act. Success hinges in large measure on being able to accurately predict staffing needs."

She heads the SimiTree clinical and operational consulting teams who work with clients to evaluate staffing and workflow to put together the right balance.

“Our staffing calculator helps agencies predict their needs and identify when they're likely to be understaffed and go into overtime," Wilson said.

“Most agencies can't pay extensive overtime costs, so staffing is a critical part of what we look at as part of our comprehensive operational assessment for an agency."

A look at the risks

Risky overtime areas for agencies often include hours spent on the job when no direct delivery of patient care and services has been provided, Wilson said.

“All hours worked have to be on record," Wilson said. “That includes lunch, if lunch is eaten during work that should be done on the clock. This means if your employee pulls over in a parking lot to eat a sandwich from a drive-through on the way from one patient's home to another and actually uses that time to close out documentation from the previous visit, it's on the clock, and it counts as time worked."

Also constituting work hours are:

  • Any time spent in training or official meetings, either remotely or in the office
  • Time spent traveling between patient homes during the workday
  • All hours spent at a patient's home

The right technology

Wilson recommends agencies rely on technology to the extent possible to avoid errors and oversights that crop up when working hours are tracked manually, or when employees are allowed self-declaration of travel time.

A software solution that can track working hours and travel time is ideal, she said, especially when done in conjunction with initial scheduling rather than after shifts are completed.

In addition, she recommends agencies look for software which automatically tracks travel time as part of the scheduling process, interfaces with payroll systems, recalculates overtime when shifts are changed frequently, and offers intelligent search options such as employee proximity to patient homes or overtime alerts.

About the FLSA

The Fair Labor Standards Act, adopted in 1938, is one of the nation's oldest employment laws. It establishes minimum wage, overtime pay, record keeping and youth employment standards.

The FLSA requires all employers, from small mom-and-pop operations to enterprise corporations with multiple branches, to pay employees time and half for work that exceeds 40 hours per week, unless the employer can claim an exemption.

Wilson said agencies are also subject to state employment law, and some states, such as California, have employment laws which are even more stringent.

SimiTree can help

  • SimiTree financial consultants work with agencies to implement best practice processes and models that create cost efficiencies, including overtime.
  • Our clinical and operational consultants can provide a comprehensive operational assessment to address your agency's staffing, utilization, and workflow.
  • Our technology consultants can help you get the most out of your software, setting in place measures that help your staff work smarter and more efficiently.

SimiTree can improve efficiency, productivity, and profitability at your agency. Use the form below to contact us, so we can work together to improve the overall health of your organization.

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Let's work together to improve the health of your organization. At SimiTree, we balance financial expertise and clinical excellence to help our clients grow. How can we help you? Call us at 800.949.0388 or complete the form below.

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