Home Health Care Industry: We Don’t Want to Pay Minimum Wage

Home health care companies are not happy with the Obama Administration’s push to require that home health workers receive minimum wage, despite the industry being one of just a few to maintain profits during the worst of the recession, reports USA Today.

One of the industry’s leading companies, Home Instead Senior Care, spent at least $362,000 in 2011 fighting the proposal while it also touts an 18.8 yield ratio of investment to revenue, which was the highest in the group reviewed by the magazine Franchise Business Review.

A spokesman for Home Instead sent a news release from the Private Duty Homecare Association stating that the proposed rules would cut employees’ hours and, ultimately, hurt caregivers.


Home health companies have been more profitable in the past two years, even as other businesses have been hit hard by the economy, said Michael Lubansky, an analyst with Sageworks, which analyzes financial data for privately held companies.

A Sageworks analysis showed that publicly owned home health services companies made a net profit of 2% in 2006 and 4% in 2009, and remained stable for the past two years.

Private companies rose from a 6% net profit in 2006 to 8% over the past two years, the data show.


Minimum wage is currently $7.25 an hour, and a Labor Department proposal issued in December calls for home health agencies to follow federal wage and hour laws for their workers, overturning a decades-old law that exempted home health care aides from federal wage laws.

Home health workers were never meant to be excluded from the law’s provision, according to the Labor Department, but changing the rules would affect the quality and cost of care for consumers, the industry says.

With Medicare and Medicaid accounting for about 75% of home health care service revenue, USA Today reports, salary increases in the industry could mean that the already-stretched government programs won’t be able to keep up.

Read the full USA Today article here. The publication also recently ran another article talking about how high turnover affects home health quality, and how this could be related to low wages.

Written by Alyssa Gerace