Home Hero has been my competition as we are a W2 model agency. We always have been a W2 model agency. However, my comments are from a completely different angle.
Today the legislators, the $15 wage movement and the decision makers are missing a very crucial point. As a result of the excessive legislation, increasing the minimum wage, increasing workers comp premiums etc, we are making the cost of care unaffordable. Today only a small population of the seniors can afford it.
It is true that the caregivers make only about 55% — 65% of what the customers pay for the services. So what happens to everything that is charged beyond that? What the general public and the clients don’t see is that nearly 35% -45% of the cost goes towards paying payroll taxes, worker’s comp insurance, other forms of insurance and such items. If we did not have such fancy laws, the caregivers would be earning much higher wages, while the cost of care to seniors would be lower.
I sympathize with the 1099 agencies that they are put out of business. No business deserves that. Yes the government agencies are effective in that sense and they are just following what the law says. However, what we as a community is not effective in doing is to make care affordable for the seniors. As a result of our fancy laws, we are limiting the access of care only to those who can afford it. Another byproduct of today’s situation is that this is encouraging illegal and unlawful business practices. Recently I had a client tell us that she is currently using an agency who charges her only $280/day for a live-in. I had to tell her that the agency was illegal. Today a caregiver has to be paid more than that under the current labor laws.
If I were to make a guess, more than 60% to 70% of the caregiving is paid for privately. Who protects such caregivers? Many of them paid much below the minimum wages, with no benefits. Are these care workers so invisible that we do not care for them? Who protects such families? If the laws are to protect our seniors & caregivers, how come the law does not address 60% to 70% of the clients and caregivers?
When will we answer the bigger question? How can we make care affordable for everyone? Till we answer this question as a community we will continue to be myopic about a problem that is growing every day. The issue today is not about the Home Hero’s of this world. The issue is about those seniors, who needs care, but cannot afford them.