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Mom's senior aide is working more hours. How do I calculate overtime?

Posted by HomeWork Solutions on May 12, 2020 4:45:00 PM
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Calculating Overtime for Senior CareEngaging a senior care aide to help a beloved aging family member is complex. You need to balance the needs and preferences of the adult receiving the assistance, budget, and administration. Ask any friend who has done this and they will confirm that there is one constant - that nothing is constant and needs are constantly evolving.

Many senior care aides support the elderly in Senior Living Apartment centers, many of whom are forbidding FAMILY and FRIENDS from visiting their residents during the COVID pandemic, and the aides are assuming many responsibilities that family used to do.

 

When hours increase and you need to calculate your senior caregiver’s overtime, it can get confusing sometimes. Here is a helpful example.

Background

When Grace’s elderly mother started showing signs of dementia, she knew that she couldn’t adequately provide the care that she needed for the long term. Grace's mom wanted to stay in her familiar Brooklyn home. Grace's sister lives with mom, and works full time. What to do during the day? Grace researched her options and decided that she needed a caregiver that would be with her mom on a full-time basis that could help keep track of administering her medicine on time, but also help prepare meals and make sure her mother was safe. Grace found a wonderful caretaker that had significant experience working with elderly patients and she hired her to work in her mother’s home.

Challenge

Grace hired the caretaker to work 45 hours a week, and they agreed to a net pay of $750 a week. After several months,  Grace’s mother’s health needs and her sister's work schedule have required the caretaker to put in extra hours. She has talked to Grace about getting overtime, because she is working above and beyond what she was hired to do. Grace now needs to calculate what her overtime pay should be.

Solution

Grace realized that by paying the senior caregiver through a net pay agreement, she really didn't know what the caregiver's hourly rate was! After Googling for advice, Grace found HomeWork Solutions.

First, Grace needed to determine the gross pay for the week to net $750 after taxes – this will be trial and error depending on state and filing status using our tax calculator. Once that is determined, Grace used our simple hourly rate calculator. She plugged in the gross wage and New York state where the work was performed, as well as the other details of their employment and easily calculated the caregiver's hourly rate versus her overtime rate.  

Result:
Work state: New York
Gross Wage: $969.69
Federal withholding: $98.10
Social security: $60.12
Medicare: $14.06
New York: $44.19
FLI: $2.62
SDI: $0.60
Net pay/salary : $750.00
Pay frequency: weekly
Weekly hours worked: 45
Residential status: live out  

Hourly wage: $20.41 
Overtime wage: $30.62

It’s important to note that because are more than 40 hours worked during the week, all of those extra hours should be paid at the increased overtime rate.

Grace realized she was in over her head, and phoned HomeWork Solutions for help. She enrolled in HWS Complete Payroll Services and going forward the caregiver will be paid based on her hourly rate, not her take home or net pay. Problem solved, and everyone is happy with the solution.

Still not sure how it all works? HWS complete payroll services make this effortless. We are experienced in working with household employees of all income levels and will step in to do all of the calculations for you, so you don’t need to worry. If you try to tackle the project and make a mistake, this could be costly. So, don’t risk it. Contact us today for information in getting your employee’s net payment agreement set up.

Topics: agency, senior, CPA

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