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New Law Could Increase Home Health, Hospice Labor Costs 30%

Posted on Wednesday, September 18, 2019 5:31 PM

A bill passed by California Lawmakers last week, could have a damaging effect on home health care and hospice agencies.  The legislation, AB5, expands the definition of “employee” resulting in more workers being eligible for benefits, overtime and unemployment. 

“One of the new standards for direct contractors is that workers must be free from control and direction of the hiring entity,” Angelo Spinola, a shareholder and attorney at Littler Mendelson, told Home Health Care News. “That would prevent home health and hospice from passing the test.”

In California, home care agencies are required to hire caregivers as employees, but hospice and home health providers can hire therapists and other workers on a contract basis.  Losing that ability, the bottom line for these providers could drop by up to 30%.

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