New York probes home-care agencies over suspected labor violations

New York state officials are investigating potential labor violations among home health agencies that employ aides who care for elderly and disabled people in their homes.

The probe is fueled, at least in part, by information gathered by 1199SEIU United Healthcare Workers East. The union, which represents home health aides in about 50 agencies, has expressed concerns that some nonunion employers are gaining an edge by not offering the full amount of wages and benefits required by law.

The state Office of the Medicaid Inspector General and the state Department of Labor began auditing agencies in June as part of an investigation into their compliance with the Home Care Wage Parity Law, OMIG told Crain's. The statute, which took effect in 2012, requires employers to offer workers a minimum amount of supplementary compensation in the form of benefits or additional wages on top of their base pay.

In a report released earlier this week, the city's Paid Care Division—which has been working to identify home-care labor issues over the past year—called suspected wage-parity violations "a broadly shared concern within the industry." It also noted that the state has yet to announce any enforcement actions to address them.

"There are enforcement actions underway," a Labor Department spokesman said.

For years 1199SEIU has been pressing the state to dig into noncompliance with the Wage Parity Law by nonunion shops, said Helen Schaub, its state policy and legislative director.

While it is difficult to avoid paying the minimum hourly wage, it is easier to get away with offering benefits that don't add up to the full amount of supplementary compensation required, Schaub said.

"It's really frustrating because we hear from our employers all the time that they are being undercut by agencies that say they can take the work for lower rates [through contracts with health plans]," Schaub said. "And when we look into it, we see it's unlikely they are fully compliant with wage-parity and other laws."

The union has yet to prove these claims but launched an undercover inquiry a couple of years ago to gather evidence. In 2015 it sent members to apply for jobs as home health aides at agencies it suspected were not complying with the law. It then compiled affidavits from the applicants that detailed what they had learned about the companies' policies and submitted them to the state. The union provided some of the documents to Crain's with the names of the employers redacted.

"Information provided by 1199SEIU has helped inform determinations regarding potential agencies to be audited," OMIG said.

Using a spreadsheet, the union compiled notes on 15 agencies. In a column titled "Unlikely to be Wage Parity Compliant," it wrote of one employer: "Agency does not appear to provide supplemental wages or benefits other than five vacation, five sick days and a MetroCard to certain workers." Of another, it wrote: "No paid time off or other differentials."

The audits are not the only efforts the state is making to clean up the home-care industry, which has roughly 1,500 licensed agencies and which Schaub likened to the "Wild West." Earlier this year state health officials began raising concerns about the quality of care provided by the plethora of small, for-profit home-care employers as the department considered controversial proposals to consolidate the industry.

Ultimately, policymakers included several measures aimed at boosting oversight and weeding out smaller players in the state budget legislation on health and mental hygiene for the coming fiscal year (which was printed but had yet to be voted on Friday afternoon). The legislation would limit the number of home-care agencies each Medicaid managed long-term care plan can contract with; require the state committee that licenses new agencies to consider whether there is a public need for each one; and make agencies register with the health commissioner each year in order to continue operating.

"New York probes home-care agencies over suspected labor violations" originally appeared in Crain's New York Business.