How Your Caregiver Registry Can Navigate A Whole Government Approach To Protecting Workers

There’s been a lot of recent movement in the regulatory and political landscape that affects home care registries, and we’re here to keep you up-to-date on what you need to know. 

Several federal agencies have a stake in creating policies, legislation, and regulations that pertain to home care registries. Current state, there are a handful working in conjunction with each other to protect workers. 

What does that mean for you? Let’s break it down. 

Here are the entities that we’ll touch on in today’s article: 

• Department of the Treasury 
• National Labor Relations Board (NLRB)
• Department of Labor (DOL)

Department of the Treasury

You might be thinking to yourself, what does the Department of the Treasury have to do with regulating a home care registry? It’s not so much that they’re regulating you specifically, but they have done some interesting research and created a report on Labor Unions and The Middle Class. 

Due to globalization, the use of technology, and other factors, they’ve noted that workers tend to benefit from being a part of a union. For you, that means the risk of losing independent contractors to competing entities that hire caregivers on a W2 basis. 

The current administration’s policies are not friendly to the independant contractor. This has created some barriers for you and your registry as you search for contractors. This was especially evident in their effort to promote the passage of the Protecting the Right to Organize (PRO) Act, among other robust measures to protect workers and their rights to negotiate and bargain. 

Coming out of a speech from the Federal Trade Commission, they’ve voiced support for giving independent contractors permission to form unions and collectively bargain around wages and fixing prices, etc…as it doesn’t violate the antitrust laws because they weren’t intended to be used the way that we think of independent contractors today. You can read the transcript here.

National Labor Relations Board (NLRB)

Currently, the NLRB is pursuing a more expansive interpretation of the common-law test for defining an “employee” per the National Labor Relations Act (NLRA). It’s demonstrated commitment to this expansive approach, rejecting narrower definitions in recent cases. 

The risk for home care registries, in this case, is that although you may have “independent contractors,” for NLRB purposes, they may be considered employees—constituting a misclassification in their eyes. 

Recently, this had been deemed a standalone violation of the NLRB, making investigations and audits high-risk for any entities with contractors like home care registries.

What’s helpful to keep in mind is the Common-Law test. 

• Behavioral: Does your company control what workers do?
• Financial: Are you in control of the business piece of their work? (Ex: How they are paid)
• Relationship: Does the worker have benefits? Is there a written agreement?

Maintaining degrees of separation between your registry and workers is crucial to passing an audit. 

Department of Labor

The Department of Labor administers laws at the federal level that “guarantee workers' rights to fair, safe, and healthy working conditions, including minimum hourly wage and overtime pay, protection against employment discrimination, and unemployment insurance.” 

In October, they are due to issue final regulations that define what an employee is for FLSA purposes, or the Fair Labor Standards Act. As a quick refresher, the Fair Labor Standards Act deals with issues like minimum wages, paying for time-and-a-half, and child labor. 

With the final regulation in mind, there are three potential courses of action: 

• Current regulations issued in 2021 are rescinded without additional regulations
• 2021 regulations are removed and proposed regulations go through 
• 2021 regulations are removed and proposed regulations go through that are modified 

Current regulation under the IC Rule, based employee and independent contractor status on 2 factors: 

• a worker's control over the individual's work
• the person's opportunity for profit or loss

Today’s looser regulations have made it easier for independent contractors to find and maintain work for their businesses, including caregivers being matched with clients through your registry.

The proposed regulation from the DOL mirrors legislation from the Obama Administration, back from 2015. It includes six factors, to be taken into consideration, in total instead of two factors:

• Opportunity for profit or loss depending on managerial skill
• Investments by the worker and the employer
• Degree of permanence of the work relationship
• Nature and degree of control
• Extent to which the work performed is an integral part of the employer’s business
• Skill and initiative

With these factors to consider, it makes it more difficult for home care registries to classify caregivers as contractors. Do keep in mind that this definition is for FLSA purposes, and there are other state regulations that you need to maintain. 

As a rule of thumb, make sure to maintain FAB-2018-4, this talks about specific guidance that helps registries to understand how they can maintain independent contractors and what constitutes an employee caregiver in the eyes of the DOL.

A whole government approach means your staff have to be working as a whole too

There’s no singular governing body that has all of the control over relevant regulations to your registry, but the government is taking continual notice of the industry. With the whole government working together to protect workers, it requires all of your team members to be on the same page. 

The government typically hasn’t favored independent contractor work because of the protections that employees are afforded through their regulation, via the IRS, employment laws, etc.

One of the chief reasons being unionization, and employees being able to organize, bargain, and more. Employment taxes is how social security, Medicare, and other crucial taxes are drawn from and independent contractors inhibit this collection. 

This creates a barrier to how your registry functions, making it extremely important to read into the details and understand what needs to be done.

Make sure that you follow your state and applicable federal guidelines for your home care registry. With Ally by your side, we’re able to work alongside you and add distance between you and caregivers who work with your registry through third-party payment processing, and a purpose-built platform for registries that you don’t need to retrofit or customize.