Special Report — Complying with Wage and Hour Regulations

The SESCO Report July/August, 2022 (Part 2 of 3*)

Common Misconceptions and Compliance Issues

SESCO is available through a Professional Service Agreement or through a per diem fee to conduct a thorough Wage and Hour as well as HR and employment law audit. Contact SESCO to learn more about our Professional Service Agreement and services provided to clients in all industries across the country — [email protected] or 423-764-4127.

Calculating Overtime

Misconception 1: If an employee is taking more breaks than we allot by policy, we can deduct those additional breaks from their pay. An employer cannot make deductions from an employee's pay who take short breaks or who take more breaks than what policy allows if the breaks are less than 20 minutes. If an employee takes any break during the day regardless of policy that is less than 20 minutes, the employer is required to compensate the employee. Please note that the Fair Labor Standards Act does not require employers to provide break or meal periods.

Misconception 2: We must pay an employee based on their clocked hours even though they may clock in early or clock out late. An employer is not required to pay an employee should they arrive early, clock in and not perform any work until it is time. SESCO recommends to utilize the 7/8 rounding method as well as implement policy stating that employees who clock in early or late and do not perform any work will not be compensated. As labor costs are your largest controllable costs, it is critical that department heads/managers/HR professionals review all time records before processing payroll. Time records can be changed/altered to reflect actual time worked and SESCO recommends that both the manager/HR Director and employee sign off stating that true and accurate hours have been recorded.

Misconception 3: If a timecard states that the employee has been paid for 48 hours, we must ensure that overtime is paid based on their regular rate for these eight (8) hours of overtime. An employer must only pay overtime for actual hours worked in excess of 40 hours per week. For example, if an employee works 40 hours in a given workweek and is paid an additional eight (8) hours for a vacation day, no overtime is required to be paid on the eight (8) hours of non-working time, re: vacation day.

Misconception 4: We have to pay overtime for break times if an employee is at work over 40 hours in a workweek. Break times will not be considered hours worked if they satisfy the following:

• The break is more than 20 minutes if it is a rest break or more than 30 minutes if it is a meal break.

• The employee is completely relieved from duty; for example, a meal break is not spent answering phones, working at their desk, working at the computer, watching over a machine.

• The employee is free to leave his or her work station.

Misconception 5: We do not have to pay an employee who works overtime, because it was not pre-approved. No, you must pay for all hours worked even if not pre-approved. The Wage-Hour Investigator will deem that the business benefited from the employee's work and that you knew or should have known that they were performing work. However, SESCO suggests a very strong, direct policy in the employee handbook discussing overtime and not working overtime unless approved. Further, disciplinary action is the most efficient way to address these types of issues.

Misconception 6: We have an exempt employee who works less than 40 hours per week; however, because they are exempt, we must guarantee the salary basis of $684 per week. The only requirement for compensation, even if the exempt employee works less than 40 hours, is to pay at least minimum wage. You do not have to pay the position the $684 per week. However, if the position works more than 40 hours per week, to avoid non-compliance, you must guarantee them the $684 per week to avoid overtime payments.

Misconception 7: Some of our employees work 24-hour shifts. They may not work all 24 hours as we do give them time to sleep and eat. However, because we require them to be at our place of business, we must pay them for 24 hours. Sleep time and meal periods will not be considered hours worked if they satisfy the following:

• The employee is on duty 24 hours or more

• The employee and the employer agree to exclude from work hours bona fide meal periods and a bona fide, regularly scheduled sleeping period of not more than eight (8) hours.

• The employer provides adequate sleeping facilities and employees usually can enjoy uninterrupted sleep period.

• Should a sleep period be interrupted and the employee is awakened and asked to perform work, that time is counted as work. If the employee gets five (5) hours of sleep, the entire sleep period of eight (8) hours can go unpaid.

*Tune-in next week for Part 2 of 3 

Health Prices Rising Much Faster in the Private Sector than Medicare

Axios | By Caitlin Owens

Health care prices overall may be lagging inflation, but there's a widening divergence between what's being paid in Medicare and the private sector, according to a new Altarum analysis.

Why it matters: Privately-insured Americans are about to pay more for their health care, if they aren't already.

The big picture: Economy-wide inflation has outpaced health care inflation over the last year — an anomaly, since medical prices typically rise faster.

• Last month, overall prices were 8.5% higher than in July 2021, but prices for medical care were only 4.8% higher, per KFF.
• Medical prices have risen by 110.3% since 2000, whereas economy-wide prices have risen by 71%.

Yes, but: July also saw a substantial divergence in what Medicare and the private sector pay for goods and services, which essentially cancelled each other out in the aggregate, according to the Altarum analysis.

• Medicare prices fell by almost an entire percentage point last month, which dropped them below where they were in January 2021.
• The drop was due to low or no increases in the reimbursement rates for hospitals and physician services, which are decided by the federal government, and mandatory cuts for Medicare provider payments kicking in this year.

In the private sector, the opposite happened: prices rose last month and reached 5.4% above what they were in January 2021.

• "We believe many of these increases are occurring as new contracts or updated rates are slowly taking effect, and further expect there may be a noticeable discrete jump in private prices beginning in 2023," the authors write.
• Hospital rates have risen the most and are 7.2% higher than January 2021. They've risen by nearly a full percentage point in each of the past three months alone.
• Faster increases within the hospital sector may be a result of greater negotiating power with insurers amid ongoing consolidation, the authors note.

The bottom line: There's already a huge difference between what Medicare and private insurers pay for health services, and that disparity is on track to only grow.

Fighting Current and Future Coronaviruses with a Single Vaccine

National Institutes of Health | By Sharon Reynolds

Vaccines against SARS-CoV-2, the virus that causes COVID-19, have greatly reduced the risk of severe disease and death. However, SARS-CoV-2 continues to mutate in unpredictable ways that can reduce the effectiveness of the current vaccines. The risk of a new coronavirus spilling over from animals to people also remains a serious concern.

Researchers are trying to produce a vaccine that would protect people from both future SARS-CoV-2 variants and related coronaviruses that might pose a threat. To this end, an NIH-funded team led by Dr. Pamela Bjorkman from the California Institute of Technology created a nanoparticle-based vaccine that prompts B cells, which produce antibodies, to recognize parts of coronaviruses that mutate less often.

Current COVID-19 vaccines target parts of the SARS-CoV-2 virus that quickly mutate. Like those, the nanoparticles in the investigational vaccine display a part of the coronavirus spike protein called the receptor binding domain (RBD), which coronaviruses use to enter human cells.

However, the team combined RBDs from eight different coronaviruses for their vaccine. Each nanoparticle included 60 RBDs, so that any two adjacent RBDs were rarely from the same coronavirus. B cell receptors bind strongly to identical targets that are near each other. So, this design encouraged B cells to target areas that were similar across the RBDs—ones that tend to mutate more slowly.

The researchers tested the new vaccine, called mosaic-8, as well as a nanoparticle vaccine made only with RBDs of SARS-CoV-2. Results were published on August 5, 2022, in Science.

The team used mice that were engineered to make the human ACE2 protein—the target of the SARS-CoV-2 spike. Following vaccination with mosaic-8, the mice produced antibodies that recognized a range of coronaviruses. As expected, the antibodies recognized parts of the RBDs that remained similar between coronaviruses.

When challenged with SARS-CoV-2, mice that received either of the nanoparticle vaccines were protected against symptoms of severe COVID-19. However, only the mosaic-8 vaccine also protected mice against a related virus, SARS-CoV, which caused the SARS outbreak of 2003. This protection occurred even though SARS-CoV wasn’t part of the mosaic-8 nanoparticle.

Similar results were seen in non-human primates. Monkeys that received either the mosaic-8 nanoparticle or the SARS-CoV-2 nanoparticle were protected against severe COVID-19. But those that received the mosaic-8 vaccine were also protected against the SARS-CoV-2 Delta variant and SARS-CoV, neither of which were included in the vaccine.

“We can't predict which virus or viruses among the vast numbers in animals will evolve in the future to infect humans to cause another epidemic or pandemic,” Bjorkman says. “What we're trying to do is make an all-in-one vaccine protective against SARS-like [coronaviruses]. This sort of vaccine would also protect against current and future SARS-CoV-2 variants without the need for updating.”

The researchers are now preparing to test mosaic-8 in a human clinical trial.

Your Assistance Needed to Combat Medicare Payment Reductions for Home Health

The Health Group 

The National Association for Home Care & Hospice (“NAHC”) needs the industry to be vocal regarding the CY 2023 Medicare home health services Proposed Rule, which includes 2023 payment rates and a variety of other changes.

NAHC has submitted comments on the proposed rule which include:

• More than 300,000 Medicare beneficiaries have lost access to home health services in recent years, with over 1,000 HHAs having closed, and Medicare spending in 2020-2021 at its lowest point since 2010.
• Congress required that CMS institute a budget neutral payment model in 2020. That model underpaid home health agencies by 2.5 to 3.2 percent in contrast to the 6.9 percent overpayment alleged by CMS.
• CMS’s evaluation as to whether the new payment model was “budget neutral” is fatally flawed in its methodological approach and is inconsistent with comparable evaluations that CMS applied in other sectors.
• CMS’s evaluation methodology is at odds with the clear mandates established by Congress in 2018 in all respects.
• CMS compounds the risks to patient care by adding new, unnecessary costs while failing to adequately recognize the significant labor and transportation cost inflation that has hit home health services.
• CMS is pulling resources from home health care at a time it is depending on that care to reduce Medicare spending on hospitalizations and other care.

You can go to Ask Congress to Prevent Home Health Cuts that Will Devastate Access to Care. Support S.4605/H. R. 8581 (p2a.co) to show your support for the Preserving Access to Home Health Care Act and help to avoid home health payment cuts.  NAHC has also scheduled September 14, 2022 for a Capitol Hill Day of Advocacy. You can register for this event at NAHC Advocacy Day • RSVPify.

The proposed payment rate cut of 7.69 percent will place many home health agencies at financial risk.