Do I Need To Pay My Caregiver Overtime?

Whether you must pay a caregiver overtime for hours worked depends on whether labor laws classify their work as companionship or domestic services. Under Illinois law, live-in caregivers and personal attendants hired by private employers may be exempt from overtime pay, but third-party employers must pay overtime for compensable time over a forty-hour workweek. Failure to pay premium compensation for overtime is wage theft, and home health aides can seek back wages and liquidated damages based on payroll records.

In 2015, the Fair Labor Standards Act (FLSA) changed nationwide: In-home caregivers hired by an agency or third-party employer became eligible for overtime pay. However, in-home caregivers providing companionship services and live-in domestic service employees hired directly by a family or individual may be exempt from federal overtime requirements.

“But if a state overtime law is more protective of a worker than a federal law, the state law applies,” says Lori Goldstein, an employment & labor attorney in Northfield. “And Illinois law does not exempt caregivers, even if they work for a private family. It became confusing. Caregiver agencies and families didn’t know who was exempt and who was not exempt.”

Wage and Hour Laws Regarding In-Home Caregivers

Effectively, nothing changed in Illinois, as state law already enforced overtime pay for all in-home caregivers. It did give home care agencies a scare, however. “The agencies were worried they were going to lose their businesses,” says Goldstein. “They thought the families were going to have a leg up on the agencies.”

What complicates the situation is that in-home caregivers and personal attendants are not the same as domestic service workers. In Illinois, an individual or family can employ a domestic worker without paying overtime. “Domestic service is different in that it’s housekeeping, babysitting, cooking, laundry — but it doesn’t include being a companion for somebody,” says Goldstein.

“You can still be a caregiver who comes and goes,” she continues. “But if you’re doing something that is health-related or companion-related, it is not considered domestic service.”

To add to the confusion, Illinois has a general overtime exemption for employers with fewer than four employees, but it doesn’t include in-home care workers or home health aides.

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Paying for Around-the-Clock Care

These days, many who need caregivers require someone who can work around the clock, though most households can’t afford to pay a worker literally all the time.

When overtime gets thrown into the mix, it can get even more expensive, especially when on-call time is compensable because the employee is so restricted that they cannot use the time effectively for their own purposes.

But the biggest issue for employers? Illinois has the One Day Rest in Seven Act labor law, which, Goldstein says, “means employees have to be given 24 continuous hours for sleep time in each workweek.” She adds that many hire more than one caregiver, using multiple part-time workers to resolve the issue.

The Importance of Having Clear Contracts

Goldstein notes that a clear contract is key. That means outlining just what the hourly rate for overtime pay is — time-and-a-half for each hour over 40, or an annual salary for a certain amount of hours plus half-time pay.

“You have to be really clear in your contract about what the schedule is, what hours you’re getting paid, when you’re going to get paid and overtime rules,” Goldstein says.

“You have to be very concerned about what’s considered actual worktime. For example, you can agree that you’re going to sleep eight hours at night. You can agree to pay or not pay for certain off-duty times.”

Find Legal Help

If you’ve hired an in-home caregiver and are unsure about the regular rate of pay and overtime pay, or how to set up a clear contract, reach out to an experienced wage and hour law attorney in Illinois. An employment lawyer can answer your questions about overtime requirements, independent contractors, or healthcare.