The Voice

In This Issue:

Executive Corner

Feature Article

Public Policy/Advocacy News

Member News

Featured Associate Members

Welcome the Newest Members of HCAOA

Executive Corner

What a difference a year makes. About this time last year we were celebrating a victory over the governmental overreach by the U.S. Department of Labor (DOL) in the U.S. District Court of the District of Columbia in Home Care Association of America v. Weil . The Court's decision to vacate the DOL effort to deny third-party employers access to the companion care exemption was considered one of the association's most notable victories at the time. Conversely, we end this year with a decision by the U.S. Court of Appeals for the District of Columbia Circuit to uphold the DOL Rule, reversing the district court's decision that had previously vacated the Rule.

On November 18, HCAOA and our litigation partners filed a writ of certiorari petition appealing to the U.S. Supreme Court to hear the case while the DOL rule goes into effect. As part of HCAOA's efforts, we will be seeking support from other stakeholders in the form of amicus briefs. We anticipate groups representing the disability community will exhort the Court to hear our case, emphasizing how the Rule has been harmful to caregivers and the clients they serve. While we have come up short in the latest skirmish, our petition to the Supreme Court is under consideration and until we hear from the highest Court, we hold out cautious optimism that the Court will respond favorably to our appeal.

In the meantime, in partnership with Home Care Pulse, we sent out an industry survey to gauge the impact of the DOL Rule going into effect as a result of the federal appeals court ruling. The survey received a considerable response from 444 providers. The results show 62% of providers said the decision would have a negative or highly negative impact (29.8% of them rated it as highly negative), and only 10.5% of providers, rated the impact as positive or highly positive. Providers expressed concern about the strong influence the decision may have on services and caregiver retention, and they have begun searching for and implementing changes to accommodate the shift. In this survey, the top three expected actions by providers in response to the decision are as follows:

1) Cutting caregiver hours,

2) Rescheduling to avoid paying overtime, and

3) Raising fees to cover added costs.

Those who plan to raise fees expect to increase their rates, on average, by $1.50 for hourly and $55 a day for live-in care. The solutions vary across regions and agencies, but as providers approach the start of 2016, they need to develop detailed plans of how they'll implement these changes in the upcoming year.

In that regard, HCAOA has developed a guidance document to assist members in complying with the DOL Rule. The document provides background information about the DOL's attempt to change its rules, the different court opinions, and the immediate impact on the home care community. In addition on Nov. 16, Maury Baskin (lead attorney in the DOL lawsuit) and Angelo Spinola led a webinar to discuss compliance strategies in light of the Rule. (See related article in this issue)

Furthermore, HCAOA is supporting legislation introduced by U.S. Congressman Tim Walberg (R-Mich.) and U.S. Senator Pat Roberts (R-Kan.) to ensure seniors and individuals with disabilities have access to affordable in-home companion care. (See related article in this issue)

We are obviously disappointed with the current circumstance of the litigation; however, as a result of our effort, this issue has had a unifying effect on both the industry and HCAOA. With your collective support, HCAOA has gained credibility and positioned itself as a formidable organization representing the home care industry. The state of the association is otherwise vibrant as we continue to execute on the HCAOA strategic plan focusing on a public awareness component beginning in early 2016.

I want to take this opportunity on behalf of the HCAOA staff to thank HCAOA President Peter Ross and the Board of Directors for their leadership over the past year, our Associate Members and sponsors for their incredible support of the organization, and most importantly the HCAOA members and their clients for which we proudly serve.

Wishing you Happy Holidays and a healthy and prosperous 2016!

In This Issue

Highlighting this issue of The Voice is our feature article addressing on-demand service business model startup companies, a follow-up to a previous article we ran describing concerns on how some of these companies may be misclassifying workers. In addition, the Public Policy/Advocacy News section recaps key issues we are covering on the federal and state level. The Members News section includes a summary of our successful 2015 Annual Leadership Conference that was held in our nation's capital, Washington, DC, September 27-30 and provides information on planning for next year's annual meeting.

Feature Article

Follow Up Report: The On Demand Service Business Model and the Future of Home Care Workers

As 2015 Comes to a Close, HCAOA Continues Work to Draw Attention to Increasingly Popular 'Uber-Style' Business Models and How They May Be Misclassifying Workers.

As we reported in the fall, pressure on "Uber-style" companies, to reclassify their contractors as employees has been a hot topic across the U.S. in recent months.

With 2015 quickly coming to a close, regulators are continuing their efforts to determine when a worker is an employee in an economy that increasingly relies on contractors and temporary hires. Most notably, rideshare service Uber has been facing the possible rupture of its entire business model in a recent case that could have even further reaching implications for HCAOA members, as well as the overall national economy.

As the case swiftly expands, numerous organizations such as the National Employment Law Project (NELP) and The Hamilton Project are showing their support for HCAOA's worker misclassification position. In fact, many of these groups are providing their recommendations for new labor policies that accommodate the on-demand worker.

For example, The Hamilton Project's co-authors, Alan B. Krueger, a former chief economist to President Obama, and Seth D. Harris, a former deputy labor secretary, argue in their report released earlier this month that many workers in the so-called online gig economy should have more rights and protections than most do now. At the same time, they wrote, "forcing these new forms of work into a traditional employment relationship could be an existential threat to the emergence of online-intermediated work."

Together, Krueger and Harris propose the creation of a new legal category of workers, to be called "independent workers," to address the current legal uncertainty regarding whether workers in the online gig economy should receive employment and tax benefits and protections. Their proposal would allow independent workers to gain access to collective bargaining, various forms of insurance, civil rights protections, employer-provided b enefits and tax withholding.

A Quick Overview

As you may already be aware, Uber has been facing accusations this past year that it illegally misclassifies its drivers as independent contractors rather than employees, therefore avoiding responsibility for a variety of wage and hour protections afforded to employees.

This new tech-style business model has spawned a whole industry of workers who are considered to be independently freelancing their services, rather than formally employed by a company. Other app-based endeavors, including Honor and Lyft, bill themselves not as employers but as a platform through which ordinary people can obtain services. As a result, these companies can get around paying a host of benefits, saving thousands per person, per year by treating workers as contractors.

Impact on HCAOA Members

Many of these new Uber-style ventures appear to use independent contractors and follow a similar model to domestic referral agencies, giving the appearance of being more cost effective. However, these models do not absorb the additional costs that HCAOA home care companies bear using the employer model.

The on-demand companies that connect users to services through apps have argued that reclassification as employees would mean that people would lose the flexibility that they get from working for these companies. Reclassification could also drive costs up for these companies, with an impact on their business and pricing model.

Currently, it's the role of federal and state government agencies and the courts to ensure that startups don't abuse existing independent contractor rules to exploit those workers who should really be classified and compensated as standard "W-2" employees. But as these business models continue to mushroom, public policymakers may consider replacing these employment policies developed almost a century ago with ones more appropriate to the times.

What Can You Do?

Misclassification in the home care industry means caregivers are not just denied minimum wage and overtime, but other safety net protections, like workers compensation and unemployment insurance.

With the goal of leveling the playing field for responsible employers by reducing the practice of misclassification, HCAOA believes that states must continue to support federal efforts on the part of agencies to work together to protect the rights of employees (See related article). One part of this effort involves combating employee misclassification and ensuring that workers get the wages and protections to which they are entitled. We believe that as this issue continues to blur and grow, it's vital that we continue our efforts to provide employers and their workers with a clearer understanding of what makes a worker an employee.

As an example, in May of this past year, the HCAOA Georgia Chapter led efforts to pass the Home Care Patient Protection Act (HB183) into law, culminating a huge legislative victory for home care providers in Georgia. HB 183 revises the scope of individuals who can provide services through a private home care provider. This legislation requires private home care providers to hire caregivers as employees and not as independent contractors to provide personal care, companion or sitter tasks. HCAOA has established a Taskforce to develop model legislation from the Georgia law with the goal of passing similar legislation in other states.

In 2016, we will continue our efforts to follow new developments closely, and will keep members posted as similar models develop.

Public Policy/Advocacy News

Misclassification Remains Major Issue For Attorneys and the Labor Department

Employment lawyers are scrambling to follow a rapidly changing body of law on the misclassification of workers as independent contractors rather than employees covered by a wide range of federal and state laws, a panel of attorneys said at an American Bar Association meeting Nov. 5.

The panel of management- and employee-side lawyers, joined by a DOL official, cautioned that misclassifying employees as independent contractors can create employer liabilities across a number of statutes, from the Fair Labor Standards Act (FLSA) to state unemployment insurance laws.

Deputy Solicitor of Labor for Regional Enforcement Katherine E. Bissell said the DOL is concerned that "some of these business models that are usually designed to cut costs are done at the expense of the employees."

Bissell also said the Obama administration has expressed concern that the American middle class is being squeezed by economic conditions. Noncompliance with minimum wage and overtime laws "is part of that," she said, and the misclassification of workers as independent contractors will remain a target of DOL enforcement.

IRS Commissioner Includes Worker Classification in FY 2016 Priorities

In a public letter, Sunita Lough the Commissioner of the IRS Tax Exempt and Government Entities Division, identified worker classification as a priority issue for the coming year. She plans to conduct a study of payroll and return data to to identify worker classification non-compliance. Read more HERE.

Final Rule Expected For FLSA "White Collar" Rule in 2016, DOL Solicitor Says

The DOL plans to finish revising agency regulations in 2016 on the "white collar" exemption to overtime pay under the FLSA, Solicitor of Labor M. Patricia Smith said Nov. 5.

The DOL in June issued a proposed rule that would more than double the salary basis test for determining if an employee is a bona fide administrative or executive employee. The current salary basis is $455 a week, or $23,660 a year. The DOL's proposal would set the salary threshold at the 40th percentile of the earnings of full-time salaried employees nationwide. That would raise the salary basis to a projected $970 a week, or $50,440 a year, by late 2016.

The department received more than 270,000 public comments, including over 3,000 unique comments on the proposed rule. The DOL now is combing though those comments in developing its final rule. HCAOA submitted formal comments expressing serious concerns with the proposed rule and its impact.

FLSA Companion Care Legislation Introduced in the House and Senate

On October 29, U.S. Congressman Tim Walberg (R-Mich.) and U.S. Senator Pat Roberts (R-Kan.) introduced legislation in the House and Senate to ensure seniors and individuals with disabilities have access to affordable in-home companion care. H.R. 3860/S. 2221, the Ensuring Access to Affordable and Quality Home Care for Seniors and People with Disabilities Act, would reverse harmful DOL rules that place costly regulations on families and caregivers.

"Millions of families depend on companionship services to meet their health care needs," said Walberg, Chairman of the Subcommittee on Workforce Protections. "Far reaching and costly regulations should not stand in the way of seniors and individuals with disabilities who are unable to care for themselves from receiving quality, affordable care in the comfort of their own homes."

Roberts said: "Our bill allows those in need of companion care in the home to continue to arrange and pay for individualized care without getting tangled in burdensome and costly labor rules that were meant for other industries We preserve the independence of the elderly and individuals with disabilities in need of affordable care and protect caregivers who want predictable employment arrangements."

At issue is the DOL's rule narrowing the long-standing definition of companionship services under the Fair Labor Standards Act (FLSA). The rule would void the companionship exemption and overturn a four-decade old policy that has assisted seniors and individuals with disabilities who need affordable care and caregivers who need stable work arrangements.

House Cosponsors of the bill include: Rep. Larry Bucshon, M.D. (R-Ind.), Rep. Mo Brooks (R-Ala.), Rep. Lynn Jenkins (R-Kan.), Rep. Phil Roe, M.D. (R-Tenn.), Rep. Todd Rokita (R-Ind.) and Rep. Adrian Smith (R-Neb.).

Senate Cosponsors include the Chairman of the committee of jurisdiction, the Health, Education, Labor and Pensions Committee, Lamar Alexander (R-Tenn.), Johnny Isakson (R-Ga.), John Cornyn (R-Texas), Mike Enzi (R-Wyo.), Orrin Hatch (R-Utah), James Risch (R-Idaho), Deb Fischer (R-Neb.), Jeff Flake (R-Ariz.), John McCain (Ariz.), David Vitter (R-La.), Dan Coats (R-Ind.) and Jerry Moran (R-Kan.).

As the home care community awaits a decision from the Supreme Court on whether to consider the legal case against the DOL, HCAOA feels the time is right to begin educating Congress in the event the statute needs to be clarified.

HCAOA asks all members to contact your Representatives and Senators to urge their support for this critical legislation HERE.

HCAOA Members Visit Capitol Hill as part of Congressional Lobby Day

On September 30, 115 HCAOA members visited Capitol Hill covering 29 states, including 69 unique House office visits and 58 unique Senate visits. By far, the largest Capitol Hill event in HCAOA history.

HCAOA members were briefed in the historic Senate Caucus Room by HCAOA Lobbyist, Patrick Cooney to prepare them for their Hill visits. Patrick highlighted the issues HCAOA planned to address with members of Congress as follows:

Worker Misclassification
Companion Care Exemption
Joint Employer

In addition, a grassroots alert message was sent to those unable to come to Washington to participate in Congressional visits and enabled those members to support their colleagues who walked the halls of Congress throughout the day. Nearly 300 HCAOA members sent close to 900 grassroots messages to their respective Senators and Representatives in this effort.

Member News

2015 HCAOA Annual Leadership Conference Highlights

With hours of thought leadership and breakout sessions, hands-on workshops home care industry networking opportunities, and the chance to represent the home care industry on Capitol Hill, the 2015 HCAOA Annual Leadership Conference offered a unique experience for all who attended.

Keynote Address

The Conference kicked off with an inspiring keynote address by Tommy G. Thompson, Former Secretary, U.S. Department of Health and Human Services and four-term governor of Wisconsin. Thompson, who congratulated HCAOA's members for "their care of seniors and the disabled," focused on the essential role of home care in the health care industry, as well as the critical importance of political involvement at the state and federal levels.

"You help people age safely at home with the care they need," he told conference attendees. "You are the unsung heroes and heroines of our nation's healthcare system."

Annual Business Meeting

As part of the Conference, HCAOA conducted its Annual Business Meeting, featuring the President's report, the HCAOA Board of Directors election and a special awards ceremony. This meeting provided members with an opportunity to learn about the "State of the Association." Reports were presented to attendees from HCAOA President Peter Ross and several other Board of Directors members.

Peter shared his vision for HCAOA's future, which includes:

Home care will increasingly become an integral part of the health care continuum;
Technology will play a major role in the delivery and monitoring of home care;
Home care services will be reimbursed by the federal and state governments;
Regulators will be "our allies"; and,
Families will only work with certified HCAOA members.

"It's very important to understand where we are all going and how we are going to get there," he said. "As individual companies, we can't fight [Washington] D.C. alone. We need an association to fight those battles on our behalf. We need to work together because we are the voice of the home care industry."

Board of Directors Elections

During the meeting, HCAOA congratulated the following individuals as the newest members of the HCAOA Board of Directors:

Bill Archinal, Caring Senior Service
Laura deBruin, LifeStyle Options
Emma Dickison, Home Helpers
Michael Juceam, Right At Home
Julianne Roth, Companions for Living
Michaela Valentin, Home Instead Senior Care

HCAOA also recognized several individuals for their contributions to the home care industry through a special awards presentation. This year, three awards were presented to the following:

Sheila McMackin Leadership Award - Paul Hogan, Home Instead Senior Care
Allen Hager Legislative Advocacy Award - Martin Miller, Coastal Home Care
Caregiver of the Year Award - Tracey Read, BAYADA Home Health Care

California Dreaming

We're looking forward to providing the same high-quality educational and networking opportunities during next year's Annual Leadership Conference at the Hilton Anaheim Hotel in Anaheim, CA from September 25-28, 2016. Save the date and s tay tuned for details in the coming months.

HCAOA Host Well-Attended, Compliance Strategies Webinar

Recently, on Nov. 16, a large number of HCAOA members joined Maury Baskin, lead attorney in the DOL lawsuit, and Attorney Angelo Spinola, Littler Mendelson P.C., for a discussion of compliance strategies in light of the HCAOA's challenge to the DOL's efforts to dramatically narrow the companionship and live-in domestic worker exemptions from federal minimum wage and/or overtime obligations. This was the largest audience HCAOA has ever drawn for its online programs.

The presentation, Changes to the Federal Companionship Services and Live-In Overtime Compensation Rules and Practical Tips for Compliance , highlighted the latest developments with this challenge, and also covered practical compliance tips and the essentials of an effective compliance program for home care employers, such as best practices for compensating extended-shift and live-in employees.

Webinar participants also received detailed tips on how to restructure their staffing, care delivery, and time-tracking policies and procedures to reduce labor costs and ensure compliance.

The webinar is currently archived on HCAOA's Online Store (Webinars for Purchase) so that members who were unable to attend can view it at their convenience.