New Labor Rules Increase Pay for Home Care Workers. Could Impact Franchise Sector

Home care aides have been exempt from federal wage laws since 1974 but in 2015 nearly 2 million home health care workers who help the elderly and disabled will be eligible to be paid federal minimum wage and OT. There are over 4,500 home care franchises in the United States.

The current median pay for home care workers is about $9.70 per hour, higher than the federal minimum wage of $7.25 an hour, according to Labor Department figures. But overtime pay could help lift wages substantially for those who work more than 40 hours a week.

This NY Times article included reactions from home care industry representatives.

The National Association for Home Care & Hospice, and its affiliate the Private Duty Homecare Association, also voiced concerns. "While ostensibly intended to help hardworking caregivers, it will have the very opposite effect," said Andrea L. Devoti, chairman of the trade group. "Home-care companies will have little choice but to employ workers part-time rather than full-time as Medicaid payment rates and consumers with limited incomes cannot afford higher costs. Caregivers will in the end receive less pay," she said.

It remains to be seen what impact the new rules will have on the thousands of franchised home care businesses. Given the amount of time before implimentation I believe the industry will adapt and continue to maintain its high rate of growth.