Overtime affects agencies as it limits how many hours a caregiver can work without costing the company (and thus the client) more money.
While overtime laws are a net positive, they prevent caregivers from accepting more jobs without increasing the costs. So clients and caregivers are disappointed that they can not work more with clients the bond well with.
Clients can choose to pay the extra cost of having a caregiver over forty hours per week, but it is the exception, not the rule. When the situation does occur it is usually for short periods of time.
So we decided to go over how overtime affects home care companies and how they run their businesses. Just remember, every state is different with their overtime laws.
Cost of Goods Sold
The cost of goods sold are the items or services a business provides that are the backbone of what allows a company to be in business. Without this, the company would no longer exist.
For a grocery store, it’s their food. For Ford Motor Co. it is their cars. For us, it is our caregivers. So it is usually the biggest expense a company will have, which is the product they are selling.
Difficulties for Clients
As mentioned before, the overtime laws become difficult when a client loves a specific caregiver and wishes to have as many hours with that person as possible. When we mention to the clients the additional cost for going into overtime, it usually ends the conversation quickly, as the cost is prohibitive.
It is tough for families when you know there is a connection between a client and a caregiver but is not financially feasible. Clients do have the choice to spend the extra money, but just as Minute Women can’t absorb that cost, most clients can not afford to pay for it.
Costs Going Up
As costs go up for many businesses, unfortunately so do our rates. This, naturally, causes the overtime rates to increase as well. So as costs go up over the years, know that this will continue to cause the overtime rates to increase as well.
Who Pay For Overtime When?
Clients want to know when and why they will have to pay for overtime. Understandably, families can get upset when overtime bills hit their wallets and they want to understand why they have to pay. There are scenarios where we pass the cost along and other situations when we do not.
No matter the situation we always try and prevent going into overtime. It keeps our clients happy and our seniors safe at the lowest cost possible.
We pass along overtime cost when the reason for overtime is out of our control. For Minute Women the two common culprits are national holidays and snow storms.
When snowstorms are threatening we pre-plan in the days leading up to the storm to try and provide coverage without caregivers going into overtime but it isn’t always possible. We always give our customers a choice of coverage or no coverage, but sometimes that isn’t a choice at all, and we understand this.
Being in New England, with as many storms as we receive, I believe we do an outstanding job minimizing how much overtime is incurred because of Nor’easters.
When Minute Women absorbs overtime is when it was something that was our fault or preventable. Meaning, last minute call outs for reasons like car breakdowns, family emergencies or miscommunication with the office are all reasons we would absorb the cost of overtime if we needed to cover the shift with a caregiver that has already worked forty hours in the week.
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