Home Care Must ‘Plan Ahead’ For Minimum Wage Hikes

Planning ahead will be crucial for home health and home care agencies as both California and New York recently approved minimum wage hikes that mean workers will soon earn $15 an hour, according to one Los-Angeles based private duty provider.  Other states could soon follow as the momentum behind the fight for a higher wage continues to grow.

“It’s definitely a matter of planning ahead,” says David Allerby, CEO of 24Hr HomeCare, a provider of in-home care services including personal care, meal preparation, light housekeeping, medication reminders and transportation. “For the private pay side, home care organizations that plan and strategize well in advance will have the most success in the ever-changing landscape of home care.”

More than 440,000 health care workers in the state of California alone will see their pay go up gradually after Gov. Jerry Brown signed legislation authorizing the path to $15 an hour by 2022. And in New York, home care and health care workers celebrated the state Legislature’s budget agreement to boost minimum wage after much pushback from the health care industry itself.

Home health and private duty providers across the country have kept their eyes on these states amid a nationwide movement for $15 minimum wages. The push for higher wages comes at the same time when some health care workers in Texas are jumping ship for higher paying jobs at McDonald’s.

Under the California legislation, the state’s $10 hourly wage will jump to $10.50 beginning in 2017 and $11 an hour in 2018. From there, workers will see a $1 increase annually until 2022.

To date, 24Hr HomeCare has prioritized compensating its caregivers above minimum wage, Allerby says, and he plans to ensure his more than 2,000 employees continue to be compensated fairly and competitively. But all of this must be done with minimum price fluctuation for the clients.

“Caregivers are truly the key to your success,” he says. “We have to provide to caregivers for the work they do, but keep care affordable for the vulnerable, as they deserve.”

On the other side of the country in New York, the Health Care Association of New York State estimated the uptick in wages could cost hospitals, nursing homes and home care providers $2.9 billion if implemented in 2021, according to Modern Healthcare.

“As an industry that is primarily funded by Medicaid, our ability to successfully implement the new minimum wage increase is largely dependent upon state and federal reimbursements,” Claudia J Hammar, President of the New York State Association of Health Care Providers (HCP), said in a statement. “Home care providers across the state already face critical cash flow shortages due to steeply rising labor costs, declining reimbursements and the challenges of a rapidly changing and increasingly complex health care system.”

HCP represents more than 350 home care agencies across New York, primarily providing long-term home care services for elderly, disabled and chronically ill residents.

If providers are proactive and bake the wage hike into budgets, they should find success as wages go up, particularly when it comes to out-of-pocket care, according to Allerby.

“The wage law can certainly be a challenge for the industry, but it’s one the industry can certainly overcome,” Allerby says.

The actions by the two states are part of an ongoing national push for $15 per hour by workers across several industries, including fast food, retail and home care.

More than one hundred home care workers are expected to take their ‘Fight for $15’ to Washington, D.C. on April 21 to urge lawmakers to address the issue. The protest will be held at a local home health agency, Health Management, Inc. (HMI), on Thursday. The agency is just one of several D.C.-based agencies named in recent lawsuits that allege wage theft.

Written by Kourtney Liepelt

“The Fight for $15 on 4/15” by The All-Nite Images is licensed under CC BY 2.0