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Combatting the Shortage of Home Care Workers: Going Co-Op?

With the number of U.S. residents aged 65 and older projected to more than double from 46 million today to over 98 million by 2060, home care agencies face a litany of difficulties. Among these are that home care agency owners themselves are reaching retirement age. In addition, properly classifying home care workers—and even determining which test to use to classify them—is no easy feat. Moreover, the nature of home care work leads to high worker turnover, and since July 2017, a Centers for Medicare & Medicaid Services (CMS) rule has required home health agencies to meet more stringent conditions to participate in Medicare and Medicaid programs. In short, fewer and fewer workers are doing more and more for an ever-increasing caseload of patients.

One potential solution—both for the high numbers of agency owners retiring and for the difficulty in retaining home care workers—is conversion to a cooperative model. Industry advocates believe that the home care industry is a fitting candidate for the co-op business model. 

Home care agencies that employ a co-op model find that the optional ownership buy-in for staff helps not only create quality jobs, but also incentivize quality of care for patients. In 2017, according to the 2018 Home Care Benchmarking Study by Home Care Pulse, the median caregiver turnover rate across the home care industry was 66.7 percent. Conversely, Cooperative Home Care Associates, a New York–based, employee-owned home care agency, has historically had a turnover rate of about 15 percent.

On July 13, 2018, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) issued Field Assistance Issue Bulletin (FAB) 2018-4, which provides clarification for caregiver registries on employee classification. The DOL has not promulgated any further updates or clarification for employers beyond caregiver registries, but there has been a general apparent softening of the DOL’s position on the misclassification of home care workers.

Certainly, home care workers are not going anywhere—except, perhaps, to shareholder status. “Going co-op” could be exactly what the industry needs to ensure quality care for its patients and quality of life for the workers who care for them.

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.


About this Author

Valerie Fulton, Ogletree Deakins Law Firm, Columbia, Labor and Employment, Healthcare Law Attorney

Valerie graduated from Wofford College in 2013, where she earned a B.A., magna cum laude, in Spanish and History, with a concentration in Latin American and Caribbean Studies. She was Phi Beta Kappa. As an undergraduate, she studied and lived in Salvador, Brazil and Cordoba, Argentina.  She attended Middlebury College’s Summer Language School for Portuguese, in which she has a working proficiency.  She is fluent in Spanish.

She earned her Juris Doctorate, cum laude, from Washington and Lee University School of Law in 2017,...