A new federal labor rule that was heralded as a victory for home health workers has aggravated a severe shortage of caregivers, disrupting care for hundreds of Minnesota's most vulnerable residents.

Many agencies that employ home care workers say they are cutting hours and rescheduling employees to avoid paying overtime and travel costs, which are now mandated under a federal rule that took effect late last year.

The cuts have forced vulnerable adults to scramble to find new caregivers at a time when they are in short supply. Unable to fill empty shifts, some people with disabilities report difficulty getting help with basic tasks, from bathing and dressing to being transferred from a wheelchair.

Now, after disability advocates and home care workers raised the alarm, Gov. Mark Dayton is asking the Legislature for relief. Dayton is seeking $58 million in new funding through 2019 to help pay for overtime and travel costs for roughly 25,000 home care workers who provide services through the state's Medicaid program. If the funding is approved, Minnesota would join a handful of other states — including California, Massachusetts, Oregon and Washington — that have moved to help agencies comply with the costs of the new labor rule.

"If nothing is done, vulnerable people are going to face some desperate choices," warned Anne Henry, an attorney with the Minnesota Disability Law Center, a legal advocacy group.

The dilemma stems from a 2015 rule from the Obama administration's Department of Labor.

The rule says that home care workers are, for the first time, entitled to a minimum wage, overtime pay, pay for travel time between clients, and a host of other federal labor protections.

Labor advocates had long argued that broadly exempting millions of caregivers from these protections undercut the quality of home care jobs and destabilized care by contributing to high turnover in the industry.

Though hailed as a breakthrough by worker advocacy groups, the new rule has produced unintended consequences.

Rather than pay the overtime and travel costs, many home care agencies across Minnesota have simply capped employees' schedules at 40 hours a week and curbed travel to more distant clients.

Agency owners say there is simply not enough money in Minnesota's state-funded personal care assistant program to compensate them for overtime costs.

Currently, agencies that participate in the state program are paid the equivalent of $17.01 an hour for services.

But that's too little to cover the cost of paying a worker — who typically makes $11 to $13 an hour — time and half for overtime, agency owners say.

Difficult search

Lance Hegland is among hundreds of Minnesotans with disabilities now struggling to fill gaps in care.

Hegland, 43, said three of his caregivers have either quit or cut their hours since the new rule took effect. That has forced Hegland, who has spinal muscular atrophy, a genetic disease that causes his muscles to become progressively weaker, to spend 20 to 30 hours a week searching for new caregivers to fill missing shifts at his apartment near the University of Minnesota.

And recruiting new caregivers is expensive.

Hegland, who requires round-the-clock care, estimates that he is now paying $300 a month for online ads on Facebook and elsewhere seeking caregivers.

Despite this effort, Hegland said there are days when he has gone without help for basic services. A pressure sore now festers under his right leg — the result, he says, of going longer hours without someone to help him get out of his wheelchair.

"People say to me, 'Oh my god, you couldn't brush your teeth in the morning!' " he said. "But that's happening so frequently that it's no longer a shock. Our care is stripped down to the bare essentials."

In many cases, the capping of hours also means that workers don't get fully paid. When unscheduled emergencies occur, or when someone needs care beyond the 40-hour caps set by their employers, caregivers said they often work the extra hours "off the clock" to ensure their clients receive critical services.

Lost wages

Teresa Watson, a home care worker from Brainerd, estimates that she has logged more than 200 hours of unpaid work since her employer began capping her hours last fall.

Watson said she feels obligated to do the extra work because, otherwise, her bedridden clients would go without services.

"Wage theft in the home care industry is pervasive," said Francis Hall, a caregiver from Ironton, Minn., and executive board member of SEIU Healthcare Minnesota, which represents 20,000 workers statewide. "Every caregiver that I know is donating their time, because they don't want anything bad to happen to their clients."

Shawntel Harry, a caregiver from east St. Paul, has nearly had enough. With her client time capped at 40 hours a week, she no longer makes enough money to afford repairs on her car, which she needs to get to and from clients. With the job market improving, she's considering other professions, perhaps an outside sales job, that would pay more than the $13 an hour she makes now.

Like many home care workers, Harry believes the state should have moved to increase funding before the new rule went into effect.

"It was a good idea motivated by the best of intentions," Harry said of the new rule. "But without any new money, you've just cut every caregiver's workweek. And that's a recipe for disaster."

Chris Serres • 612-673-4308

Twitter: @chrisserres