Lack of Oversight Blamed in Poor Home Health Labor Standards

Home care workers are in high demand, but the job doesn’t come with many perks.

While home care workers achieved a victory when the Department of Labor ruled this group of workers were entitled to overtime and minimum wage protections, a recent report from the National Employment Law Project (NELP) reviews that nearly 2 million home care workers are underpaid and suffering in a fragmented industry. Enforcement of those rules went into effect earlier this fall.

At the same time, home health agencies are reporting that the newly enacted rules are having a negative impact on finances, resulting in some agencies cutting caregiver hours and rescheduling shifts to limit overtime.

The report urges for more oversight among private home care companies, which the non-for-profit advocacy and research group argues have shortchanged workers over the years and thrived in system that lacks accountability and transparency. As the demand for home care continues to rise with the swelling senior population, the poor working environment for workers could threaten the viability to meet future needs.

‘Chronically Poor Conditions’

Despite being guaranteed overtime wages, earning potential for home care workers is bleak in the current environment, according to NELP. Home care workers earn a median hourly wage between $9.83 to $10.28, the NELP report cited. Only about 40% of these workers work full time, year-round, and the average annual salary of a home care worker in 2013 was $18,598.

NELP also finds that nearly half of home care workers live in households that receive public assistance benefits such as Medicaid, food stamps and housing and heating assistance. The overwhelming majority of these workers are women, and more than half are people of color.

Despite tough working conditions, home care workers provide the bulk of services, both publicly and privately funded. Because most workers are employed by private home care companies, NELP argues that there is no accountability to ensure employment rights are met and workers are protected.

“Oversight is severely lacking at both the federal and state levels,” the report reads. “The federal government pays for at least half of Medicaid costs in each state, and yet CMS provides no oversight with regard to what a private home care agency pays workers or whether it complies with labor and employment laws.

This lack of oversight has contributed to more incidents of wage theft for home care workers, the report found.

“The lack of oversight means that there is little transparency about what the money actually pays for,” the report reads.

The current Medicaid system relies on joint funding from both the federal and state governments, though CMS has no oversight on what an private home care agency pays workers or compliance with labor laws. Furthermore, licensing requirements are inconsistent and impose few requirements. Medicare, which is completely funded by the federal government, similarly does not provide “robust” oversight of wages and working conditions, NELP argues.

As a result, home care agencies can disproportionately use Medicare funding for overhead costs and other expenses instead of wages.

“Despite the fissured structures in home care, there are policy solutions that can both promote quality jobs and quality care,” Caitlin Connolly, NELP home care fair pay campaign coordinator and report co-author, said in a statement. “Labor violations that have plagued this industry, contributing to massive turnover rates and harm to workers and their families, can and must be stopped.”

Policy and Protection

With low earnings and no oversight for working conditions, home care workers could be in short supply in the future unless reforms are made, according to NELP. Extending overtime and minimum wage requirements to home care workers was a big step for the industry, but more needs to be done, the organization urges.

“Major changes are necessary to home home care industry players responsible both for compliance with workplaces laws and the quality of home care jobs,” Sarah Leberstein, NELP senior staff attorney and repot co-author, said in a statement. “Given its power in the marketplace, the public sector must lead by increasing its investment in home care services to create quality jobs, and by attaching a strong job quality standards to public funding to ensure that labor standards are respected and more of the money actually flows to workers’ wages rather than industry profits.”

While the DOL ruling encompasses workers employed by home health agencies, it does not cover those employed in private households, and there are other gaps in the system that leave some workers more vulnerable. Strengthening the reporting requirements for hours and wages from contractors, creating new legal compliance procedures and increasing CMS oversight could help, says NELP.

The report also urged for a $15 minimum wage for home care workers, a step that mirrors recent demands from fast workers seeking higher wages. Several states and individual cities have taken steps to increase the minimum wage, but the federal level remains at $7.25 per hour.

“At a time when the demand for quality home care is skyrocketing, addressing the structural and policy gaps that permeate the industry will be essential to making home care an option for all,” said Irene Tung, NELP senior policy researcher and co-author. “A crucial first step to improving conditions for home care workers is establishing clear accountability with subcontracted work structures.”

Written by Amy Baxter