(C) Iowa Capital Dispatch
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Out-of-state staffing agencies misclassify nurses as gig workers in Iowa skilled nursing homes [1]
['Bob Livonius', 'More From Author', 'January']
Date: 2024-01-26
It’s high time to shed light on the alarming misuse of temporary “gig workers” misclassified as independent contractors in Iowa’s nursing homes and assisted living facilities.
After years of development and public discourse, the U.S. Department of Labor has issued groundbreaking rulings that definitively classify more workers as W2 employees rather than independent contractors. This marks a pivotal moment for skilled nursing facilities and assisted living facilities in Iowa, where concerns about the shortage of qualified staff persist, leading to subpar resident-to-staff ratios.
Iowa has consistently ranked poorly in nursing home facility resident-to-staff ratios, intensifying the urgency to address the issue. To cope with the staffing shortage, facilities often turn to staffing agencies, relying on them to provide W2 caregivers to ensure residents receive the quality care they deserve.
However, a disturbing trend has emerged, with some temporary staffing companies classifying Certified Nursing Assistants (CNAs), LPNs, and RNs as independent contractors, a practice that has far-reaching consequences.
A handful of companies, established around the time of the pandemic, have lured applicants with promises of higher pay while avoiding the legal obligations associated with W2 employment. These companies, by classifying workers as independent contractors, sidestep providing necessary insurance coverage and paying unemployment taxes to the state.
These companies also are not required to take tax deductions for federal or state taxes, which can jeopardize the financial well-being of their staff stuck with a large tax bill at year-end. The allure of lower bill rates may tempt facilities to engage with these agencies, but the potential risks are significant and far-reaching.
Misclassifying temporary caregivers exposes facilities to unforeseen legal and financial risks. In the event of a serious medical error, the facility can be held liable for the actions of an independent contractor, resulting in potential million-dollar legal settlements. The facility may also find itself named as a “co-employer,” and held responsible for failing to withhold taxes correctly or paying overtime wages.
Companies engaging in the misclassification of caregivers in Iowa’s nursing homes operate from outside the state, posting jobs for assignments for various facilities. Recognizing the urgency of this issue, the Iowa Coalition Against Nurse Misclassification, a coalition of 15 Iowa-based companies, has united to bring attention to regulators and legislators. The recently released U.S. Department of Labor ruling on classifying workers as independent contractors is a welcome development, promising more efficient and timely enforcement of violations by facilities in Iowa.
House Republicans in Iowa have demonstrated a proactive commitment to safeguarding the state’s nursing homes and health care institutions. Their prioritization of this issue underscores the need for comprehensive and collaborative efforts to combat the challenges posed by these out-of-state staffing 1099 staffing agencies.
By aligning the DOL rules with targeted state-level legislation, Iowa can establish a robust framework that not only upholds the federal standards but also addresses specific concerns unique to the state.
A fundamental criterion for determining the classification of a worker as an independent contractor is the level of supervision. Independent contractors should operate without direct oversight from the facility staff and management. In the context of nursing homes, where close supervision is essential for caregiver staff, especially Certified Nursing Assistants (CNAs), it becomes challenging to categorize them as independent contractors. The requirement for unsupervised work is crucial to be considered an independent contractor.
Additionally, another factor to consider is whether the tasks performed are integral to the potential employer’s business. In the case of nursing homes, providing care to residents by CNAs and nurses is inherently part of the facility’s business, suggesting an employee status rather than independent contractor classification.
If your loved one is in a nursing home, it is crucial to inquire whether all temporary staff are employed as W2 workers and not misclassified as independent contractors. The inherent risks associated with independent contractors, including potential legal and financial liabilities for the facilities, underscore the need for a comprehensive shift to eliminate independent contractor staffing to ensure the long-term well-being and safety of residents in Iowa’s skilled nursing facilities.
The recent Department of Labor rulings are a step in the right direction, and it is imperative for facilities to embrace this change for the betterment of the entire industry.
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