We are newly underway with the final independent contractor rule. Here are the top things you should be on top of.
The legal landscape for caregiver registries has always been complex. This final rule adds a new twist into the mix that aligns more squarely with judicial precedents dating back to the Obama administration.
There is stark disagreement about the rule.
What is the opposition narrative looking like? Braun Scott shared in the Senate’s Special Committee on Aging, ‘Independent work helps older adults seeking more flexible hours, supplemented income or retirement savings, opportunities to attend to caregiving responsibilities, and to the social and health benefits of continuing to work and remain active in communities.’
Experts also estimate that almost 90% of independent jobs would be eliminated by the rule’s restrictions.
The rule is being challenged.
Whether you agree with the rule or not, there is opposition to its implementation in multiple states. There are four separate lawsuits going on in:
- Texas
- Tennessee
- Louisiana
- Georgia
In Georgia and Louisiana, lawsuits were pursuing a preliminary injunction of the new final rule. The hope is that it would give businesses more time to assess needs and implement new processes and procedures to maintain and uphold its guidelines.
The lawsuits don’t pertain specifically to caregiver registries, but the pain points are felt universally across industries and regions.
For one, businesses only have had a month to fully prepare for the rule’s implementation, which creates barriers to caregiver registries and other companies that rely more heavily on independent contractors.
This is far from the end of the conversation.
Despite the fact that lawsuits and other actions haven’t stopped the final rule, this is just the beginning of the conversation.
“For caregiver registries who are having a harder time navigating the nuances of the rule, I encourage you to read it line by line and ensure that you are using technology and systems that support your business model. Caregiver registries and other businesses in this industry are highly susceptible to falling out of regulation for seemingly trivial things. The details matter here, and Ally is here as a resource for you,” Julio Barea, head of sales.
What you can do:
- Chat with other home care registry owners to see how they have prepared for the final rule and how it’s changed their operating plan.
- Consult with a business attorney that’s well-read in the legal nuances of the final rule and your unique business model, like our partner, Polsinelli.
Use a registry management system built to support best practices for an ever-changing regulatory landscape.
Most home care software platforms are built for the traditional home care agency business model. These systems aren’t equipped to support 1099 workers or your unique regulations as a registry.
Here’s how Ally, the first purpose-built registry management system can support your pursuit of the new final rule with respect to each of the six factors:
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Factor
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Best Practice
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The worker’s opportunity for profit or loss depending on managerial skill
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Ally supports the registry model in enabling caregivers to negotiate their rates with family members and clients they work with. And they are paid directly by clients (not the registry) who likely use a variety of factors to come to an agreed-upon number.
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Investments by the parties
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There aren’t usually any expenses or investments associated with caregivers in this way for registries.
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The work relationship’s permanency
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Ally supports the registry model in enabling caregivers and families to work in collaboration to determine how long the relationship will be for. The caregiver registry is not involved in the permanency; they are only responsible for matching the two parties together.
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The nature and degree of control over the work
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Ally supports the registry model by giving caregivers and clients full visibility and access to change schedules, pay rates, relationship duration. The registry exercises no degree of control over the work being done.
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Whether the work is an integral part of the employer’s business
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Ally supports the registry model by using registry-friendly language in the system and reinforcing that registries are in the business of matchmaking and not caregiving.
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The worker’s skill and initiative
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Ally supports the registry model by not including room for storing skill or initiative-related information, as that is negotiated and shared at one’s discretion between caregivers and clients only.
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Each factor impacts a different side of your operating system; not all systems will meet the new standards set forth by the Fair Labor Standards Act (FLSA). Be sure to scrutinize your systems and continually assess their ability to meet these requirements.
Use a registry management system that was designed with your business in mind. If you’re ready to switch to a platform that supports a changing regulatory environment, schedule a demo for Ally today.
