Executive Summary

The home care industry has reached a crucial turning point. Years of organizing have secured critical reforms that can potentially elevate the low wages and poor conditions that have long plagued the industry. In recent decades, hundreds of thousands of home care workers have organized unions and negotiated significant wage increases and other benefits. In 2015, most of the nation’s two million home care workers won federal wage and hour rights, after a long-fought effort to narrow the scope of the Fair Labor Standard Act’s companionship exemption. A recent wave of state and local minimum wage increases, living wage laws, and Domestic Worker Bill of Rights campaigns have further boosted workers’ legal protections.

Home care is increasingly in the national spotlight, as the movement for a $15 wage has brought home care workers into its high-profile organizing campaigns; as people with disabilities and elder advocacy groups mobilize to maintain public funding for and access to vital in-home services; and as the public increasingly recognizes that poverty-level wages and high turnover in the nation’s fastest-growing workforce will hinder the industry’s ability to meet the exploding home care needs of America’s rapidly aging population.

But home care workers’ hard-won victories could be undermined by a fundamental weakness in the structure of the home care industry: the industry’s pervasive outsourcing of employer responsibility for home care workers, combined with a lack of tools to hold employers accountable.

Few home care workers have a traditional employment relationship with one employer whom they can hold accountable for job standards. Instead, the key industry players that call the shots on worker pay have sought to distance themselves from their workforce. While the federal and state governments fund the vast majority of home care services through the Medicaid and Medicare programs, they largely rely on a host of poorly regulated private companies to hire and pay workers. And many private companies have attempted to evade responsibility by calling workers “independent contractors,” subcontracting out home care work, and using franchising schemes. As a result, home care workers may relate to multiple parties as they carry out their jobs, but can find no one to ultimately be responsible for raising wage standards or complying with workplace laws.

To turn these fastest-growing low-wage jobs into a stable profession, we must change course now and hold home care industry players responsible for both compliance with workplace laws and the quality of home care jobs. Given its power in the marketplace, the public sector must lead by attaching strong labor standards to public funding to ensure that additional money actually goes to the workers, and that publicly funded private employers comply with the law. And no matter what structure workers are employed in, they should be covered by basic labor standards and protected by enforcement that looks beyond employers’ superficial labels to hold the companies calling the shots accountable for the conditions they create.

This report offers a number of policy and action recommendations to begin to address the chronic problems facing this workforce and industry. These recommendations are aimed at achieving five main objectives:

  • Ensuring basic labor protections for which home care employers can be held accountable;
  • Stopping lawbreaking within publicly funded home care programs;
  • Prioritizing smart and strategic enforcement of basic labor standards;
  • Leveraging and increasing public investment in home care to create quality jobs; and
  • Strengthening workers’ ability to organize and bargain for greater accountability.

Strengthening accountability now will not only help historic labor reforms deliver real benefits to a growing workforce; they will also improve quality of care and services, and set the industry on a path to a more sustainable future. While a significant influx of funding is desperately needed to fully meet our nation’s growing needs and provide living wages for all workers, the proposals we offer to improve accountability point the way toward transforming low-wage home care jobs into the quality family-sustaining profession our nation so sorely needs.

Introduction

This report focuses on the two million workers in this country that work in home care. The term “home care workers” describe those that provide the in-home supports and services that allow older adults and people with disabilities or illness to remain in their homes. These workers can have a variety of job titles, including home health aides, personal care aides, caregivers, companions, and certified nursing assistants (who are employed in private homes rather than institutions). Their work includes dressing, grooming, feeding, bathing, toileting, and transferring, meal preparation, driving, housework, managing finances, assistance with taking medications, and arranging medical care.

Home care workers are employed in a wide variety of arrangements, ranging from informal arrangements with households who pay workers directly with private funds, often in cash, to the complex Medicaid system, where services are delivered, and employment responsibilities fragmented, throughout a web of public and private agencies. All too often, no matter what the work structure, no party takes responsibility for home care workers’ pay and labor conditions. The federal and state governments, which pay for the majority of home care services, channel funds through a variety of private and public intermediaries, distancing themselves from and not directly employing the workers. And home care businesses and consumers have often declined to assume responsibility for working conditions.

The outsourcing of employer functions—through subcontracting, privatization, franchising, and misclassification of workers as independent contractors—combined with complex funding streams, is endemic to the home care industry and not well understood. While much has been written about the low pay and poor working conditions that have weakened the industry, and workers’ organizing to improve standards, what has not been well documented is how the fragmented industry structures and payment streams have obscured the roles these key parties play in setting pay, working conditions, and hours, complicating efforts to strengthen accountability.

In this report, we explore the patterns and effects of, and policy responses to, outsourcing in the home care industry, arguing that a crucial first step to improving conditions for home care workers is establishing clear accountability within contracting arrangements for the rampant workplace violations that form a core feature of this industry.[i]

Section I provides data on the wages and rates of wage theft that characterize the industry. Section II describes the current lack of robust controls within the Medicaid and Medicare systems, and the failures within federal and state policy that have contributed to that absence. Section III describes the most common outsourced work structures in this highly varied and fragmented industry, including models in Medicaid and other publicly funded programs as well as in the private-pay sector, and the workplace violations that can stem from these often-convoluted structures. Section IV presents our detailed policy and action recommendations.

These policy reforms will help hold the fast-growing home care industry accountable to the workforce it depends on, and allow the industry to better meet the long-term needs of America’s aging population.


[i] When we refer to home care, we are referring to non-medical services provided to people in their homes. The home care workforce encompasses workers in two main occupations: home health aides and personal care aides. Both kinds of workers assist older adults or people with disabilities at their homes with personal care (assistance with eating, dressing, bathing, and toileting) and household services (meal preparation, shopping, light cleaning, and transportation). In some states, home health aides may administer medication or check a client’s vital signs under the direction of a nurse or other healthcare practitioner. Home care work is overlapping but distinct from the industry category “Home Health Services.”

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