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Potential overtime problems for caregiver industry

As overtime rules are set to be changed, many New Yorkers stand to benefit. The rules, which nearly double the previously set salary threshold of $23,660 annually for overtime pay eligibility, will likely benefit around 6 million U.S. employees.

Some employers, such as those in the caregiving industry, will likely have difficulty complying with the new rules. Employers who provide services to people with intellectual disabilities are concerned about their ability to follow the laws when they become effective. According to the American Network of Community Options and Resources, which represents care provider agencies, the changes will likely result in an increase of $1 billion across the industry.

At the same time, these employers must rely on state-set Medicaid reimbursement rates, out of which they pay the salaries of their workers. People who have intellectual disabilities often need care 24-hours per day, and many salaried workers routinely work in excess of 40 hours per week in order to meet those care needs. While the overtime eligibility rules will make scores of caregivers eligible for overtime, the agencies simply do not receive enough money in order to cover those costs.

The industry is currently uncertain how the conflict will be handled without states raising their caps on Medicaid reimbursement rates. At the same time, salaried employees who should be entitled to overtime under the new rules have a right to receive it. If overtime disputes occur after the effective date for the new rules, affected employees may want to get help from an employment law attorney. Those who work within the caregiving industry may want to take action at the state level in order to try to secure a raising of the cap on the reimbursement rates.

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