If you are hiring someone to help out your aging parent, the Labor Department announced this month that beginning January 2015, under many circumstances, these workers must be paid at least minimum wage and overtime for work beyond 40 hours.
The reform makes a clear distinction between "companionship" services and household or "paramedical" duties. In other words, home workers whose responsibilities are limited to things like sharing meals and accompanying an older person to church or bridge club, are exempt from minimum wage and overtime rules. But if 20 percent of their job entails cooking, driving and dispensing medication, then they are now clearly covered under this extension of the Fair Labor Standards Act.
This is a big retirement planning change in the 29 states and Puerto Rico where currently home-care workers are not entitled to minimum wage. In an additional half-dozen states and the District of Columbia, workers will receive overtime for the first time. In states where the state minimum wage is higher than the federal minimum wage, the state minimum will apply.
The Labor Department has already released an extensive guide for employers, available at DOL.gov/whd/homecare. The guide spells out the records that employers -- including individuals -- will be expected to keep and other rules they must follow.
There are 1.9 million home-care workers in the U.S. Nearly 90 percent of these workers are women and about half are minorities, according to the Department of Labor. Their numbers are expected to increase significantly as boomers age and need more help. People living in retirement may see this as an expense and a hassle, but if it makes providing home-care services a more professional job and makes it easier to find good people willing to do this work, then it is a win for everyone.