Aging Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-518

Title:

AN ACT CREATING A TASK FORCE TO STUDY EMPLOYMENT ISSUES CONCERNING REGISTRIES IN THE HOMEMAKER AND COMPANION SERVICES INDUSTRY.

Vote Date:

2/14/2013

Vote Action:

Joint Favorable Change of Reference to Labor and Public Employees

PH Date:

2/5/2013

File No.:

SPONSORS OF BILL:

Aging Committee

REASONS FOR BILL:

To study the benefits and potential concerns associated with designating a homemaker-companion agency, registry or homemaker-home health agency as the employer of individuals providing certain services to consumers for the purposes of unemployment compensation, wages and workers' compensation.

RESPONSE FROM ADMINISTRATION/AGENCY:

Wendy Furniss, Branch Chief, Healthcare Quality & Safety Branch, Department of Public Health

“The Department of Public Health opposes Senate Bill 518 as written, and provides the following information with respect to the bill.

The bill will impact the Department of Public Health, in that we must serve on a Task Force which is unrelated to public health issues. The Department of Consumer Protection regulates homemaker companion agencies/registries, and the content of the bill relates to workers compensation coverage.”

NATURE AND SOURCES OF SUPPORT:

Rennard Wieland, Connecticut Chapter, Home Care Association of America (HAOA)

“…I firmly believe that all workers should be covered by Workers Compensation and Unemployment insurances for their safety and peace of mind.

…The access agencies for the CT Home Care Program for Elders, which is partially funded by the state, requires these insurances for all homemakers and companions providing service to their clients regardless of whether they are from a registry or an employment based agency.

Further, the Ct Dept of Labor plans to reintroduce the bill from last year that essentially defines registries as employees.

Lastly, I have interviewed many homecare workers seeking employment with my agency who have worked for registries. These workers were completely unaware that they were not covered by unemployment or workers compensation insurance at those registries. This fact alone should support the need to end this worker misclassification.”

Tom Falik, The Connecticut Association of Home Care Registries

“The CT Association of Home Care Registries supports Raised Bill 518 to form a task force to study requiring home care registries to pay for workers compensations and unemployment coverage for the caregivers that they place. We would further recommend that the Bill be modified to expand its scope to cover other issues involving home care registries.”

Mag Morelli, President, LeadingAge Connecticut

“Navigating the options for homemakers, companions, and direct caregivers can be a very confusing process and we support every effort to make that decision making process easier and more transparent for consumers.

…The proposal before you today would now establish a task force to study whether these registries should take over the full responsibility for the unemployment insurances and workers' compensation coverage for all persons placed through that agency. We would be supportive of such a study as it would inform decision makers when they are considering future regulatory decisions regarding this segment of the continuum.”

Maggie Drag, Owner, Euro-American Connections, LLC

“Home care registries serve a critically important function in the care for seniors and people with disabilities. It allows caregivers who cannot, or do not want to, work for a facility or an employee-based home care agency, to find work with individuals needing care. It also allows seniors and people with disabilities to obtain care that may allow them to remain in their homes, but at a lower cost than employee-based agencies.

…Raised Bill 518 that you are considering today proposes a task force to study whether registries should be required to pay for unemployment insurance and workers' compensation coverage for the independent caregivers that they place. While we do not presently provide such coverage, we are supportive of this bill, and we would recommend that the scope of the bill be broadened to cover other aspects of the registry business model. We believe that if such a task force is formed, and has an opportunity to see how registries are regulated in other states, CT will be able to strengthen the registry business model, and allow registries to continue to provide critically needed matching of independent caregivers and elderly and disabled consumers.

I am not coming to you as a registry owner that wants to protect what appears to be a competitive advantage over employee-based agencies that face higher operating costs. In addition to my home care registry, today I also own an employee-based homecare agency which provides a different level of care for individuals that can afford it. In our employee-based agency, the caregivers are our employees, and we pay for workers compensation, unemployment insurance and liability insurance, and we supervise our caregivers in the field. The cost to the consumer is higher, and the employees in our employee-based agency receive these additional benefits, but they earn less than the caregivers that we place through our registry.

It's not that one business model is better than the other. The point is that both caregivers and consumers should have the choice. Consumers, who cannot afford a higher-priced employee-based agency, dearly need the less expensive registry model.

…We recognize that some employee-based homecare agencies would like to kill the registry business model, because it is a lower priced competitor. We think that this would be very unwise. If registries were not allowed to exist, the result would be that many consumers would (1) not be able to stay in their homes, and would go into facilities under Title 19 at enormous cost to the State, or (2) find homecare services in the underground economy. These caregivers from Craig's List, Care.com or other advertisements will not be subject to criminal background checks and will be much more likely to take advantage of seniors and people with disabilities. Also, they will be much less likely to pay federal or state income tax, since many of these arrangements will be based on cash transactions.”

Kevin Donahue, Owner, Danbury Nurses Registry

“…As proposed the Bill provides a balanced forum for lawmakers and commissioners to have open and direct communication with those businesses operating as registries in the homemaker companion industry.

We would like to provide answers to questions and concerns that you may have as well as provide examples from what other states have concluded under similar circumstances. We would like to ensure the task force has a full understanding of the benefits and challenges of this model.

…The independent contractor status of these caregivers allows for a savings to the families of at least 25% and enables the caregivers to retain a much greater portion of the remuneration when compared to employee based agencies. This cost effective model also has already had a major benefit to the State of CT because it allows families to afford care privately.

…While things have changed much in the past 8 decades we believe this model is so valuable and cost effective that it needs to be an ongoing option for consumers and caregivers.”

NATURE AND SOURCES OF OPPOSITION:

Martin Acevedo, General Counsel, Companions & Homemakers, Inc.

“…Respectfully, we do not believe such task force is necessary. We believe, instead, that existing law already has answered these questions in the affirmative and that, instead of having the task force 'study' the issue, the task force should support ongoing eradication of worker misclassification in the home care field. Caregivers employed by registries are, indeed, employees of the registry. In fact, it is our understanding that the Connecticut Department of Labor is prepared to introduce a bill which will define caregivers placed by registries (and caregiver referral agencies), once and for all, as employees of those registries.”

Reported by: Amy Linskey & Art Mongillo

Date: 2/19/13