Operators working overtime to deal with new labor realities

John O'Connor
John O'Connor

Labor costs typically eat up 50% to 75% of a facility's operating budget. So it's small wonder that wage issues are at the heart of so many management-labor battles.

And by all indications, things may just be heating up.

Consider what just took place in Arkansas. There, the state's highest court retained class-action status for a lawsuit alleging uncompensated care.

The Arkansas Department of Veteran Affairs made nursing assistants work before and after scheduled hours. It also docked workers pay for untaken lunch breaks. The department then turned a deaf ear when workers complained, according to court testimony.

If you are an employer who inadvertently or advertently committed similar offenses, this might be a good time to start worrying. But that development may pale in comparison to a new overtime plan the White House is crafting.

President Obama said he would recommend changing overtime rules so the threshold under which “virtually all workers” would qualify for overtime pay would more than double -- from $23,660 to $50,440.

Blogging earlier this week in the Huffington Post, Obama said that “too many Americans are working long days for less pay than they deserve.”He added his proposal would help assure that “hard work is rewarded.”

While the rule change must first undergo a public-comment period before it can be finalized, the administration has the power to issue the regulation without congressional approval. The changes could take effect as soon as next year.

It's still fairly early in the game here, but it's apparent that such a rule would leave many operators with two difficult options. One is to pay more overtime, and see labor costs rise even more as a percent of overall operating costs.

The other is to cut hours for existing staff to below 40 a week, and try to fill in the gaps with more part-time employees. You don't have to be a labor expert to see what that kind of adjustment is likely to do to morale, care quality and staffing woes.

So don't let the cool weather so far fool you. As far as many operators are concerned, a long, hot summer appears to be in the forecast.

John O'Connor is the editorial director at McKnight's.

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Emily Mongan.

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