Recent legislative changes in California are increasing the costs of long term care across various types of care. Well-intentioned but mandated increases in the costs are resulting in higher prices to consumers who need care.
On January 1, 2014 Assembly Bill 241 became effective, altering the eligibility criteria and calculation of overtime for caregivers to seniors, children, and disabled. Starting this year, caregivers receive overtime pay after their 9th hour in a given day and after their 45th hour in a week. This overtime requirement applies regardless of whether the Caregiver is hired through a company or hired directly by the consumer.
Additionally, this summer minimum wage rises to $9 per hour throughout the state. On July 1 not only healthcare workers, but entry level workers across all industries in California will benefit from an 12.5% raise. Increases in the minimum wage will have ripple effects, as employers will need to increase wages for non-minimum wage positions in order to continue to recruit and retain similar levels of talent. Minimum wage will climb again, to $10 per hour on January 1, 2016. For the history and future of California’s minimum wage, view this chart from the Department of Industrial Relations: https://www.dir.ca.gov/iwc/
Consider this example for a common 12-hour shift. Last year the minimum wage for this shift was $8 per hour, so the cost for the shift (excluding all taxes) was 12 hours X $8 = $96. After June 2014, the same shift at minimum wage will cost (9 hours X $9) + (3 hours X $13.50) = $121.50. With the combination of this legislation, the cost of a 12 hour shift increases 26%. California legislators have made it much more expensive to remain in one’s own home with caregiving staff.
In the next couple of years changes to employer-provided health insurance and licensing requirements are going to continue to affect the costs associated with long term care. As prices continue to increase across the board, it is becoming increasingly necessary to plan for upcoming needs with trusted advisers who are knowledgeable about the current and future legislative and healthcare environment.
For more information on this article, home care, or other long term care options, you are welcome to contact the author, David Chong at Coast Care Partners, (619) 354-2544, or David@CoastCarePartners.com.