$7 Million Settlement Marks Latest in New York’s Home Health Care Crackdown

The settlement comes as legislators and organizers in New York rally for proposed legislation called Fair Pay for Home Care, which would increase the minimum wage for home healthcare workers by 150 percent. 

Two Brooklyn-based home health agencies are paying millions in back wages and Medicaid payments following two settlement agreements with New York Attorney General Letitia James.

Crown of Life Care and All American Home Care were failed to comply with New York’s Wage Parity Act, which requires home health companies to pay workers who perform Medicaid-funded care an additional $4.09 per hour—or the equivalent in additional benefits—on top of the minimum wage, according to the settlement documents.

Instead, Crown of Life Care used the Medicaid funds intended for worker benefits to purchase medical stop-loss insurance for the company, the documents show.

As part of the settlement, All American Home Care paid back $4 million in Medicaid payments; Crown of Life paid $1.4 million to the Medicaid program. Crown of Life will also pay more than $1.5 million to employees who did not receive full payment of wage parity benefits, as part of a separate agreement with the New York State office of Attorney General Labor Bureau.

For the next two years, All American is also required to submit semi-annual reports proving it is in compliance with the Wage Parity Act.

“It is outrageous to cheat home health aides of their hard-earned benefits guaranteed under New York law and the Medicaid program,” said Breon Peace, attorney for the Eastern District of New York, in a press release last week.

The crackdown is one of the latest in an increased attempt by city and state officials to improve enforcement in the rapidly growing home health care industry, and where advocates are pushing for higher wages and better work conditions. In November, Attorney General James announced two home health agencies, Intergen Health and Amazing Home Health Care, would have to pay $18.8 million in restitution to approximately 12,000 workers related to unpaid wages.

In December, a federal case against home health agency Scharome Cares Inc. was settled for $600,000 for damages, penalties, and unpaid wages and overtime for its workers.

Home health aides are certified to perform a range of intimate and grueling tasks for elderly or infirm individuals, including bathing, changing, lifting and assisting with going to the bathroom. They are also one of the lowest paid professions, making a median wage of under $20,000 a year in New York State, according to the nonprofit PHI. These wages keep the majority of the state’s workers at or below the poverty line. The workers are predominantly women, and in New York City, about 80 percent are immigrants, according to PHI.

In 2017, the city’s Department of Consumer and Worker Protection (DCWP) launched an investigation into about 40 home health care agencies for paid sick leave policies. The investigation into All American resulted in $1.2 million in penalties and relief, related to “non-payment, low usages and improper accruals of sick time” as well as a written sick time policy that limited the amount of time for workers who made less than a base rate of $12.69, according to documents obtained through a public records request.

Following worker interviews, the city investigator determined that “a large majority of the workforce believed that they would not receive payment for sick time use and/or any other benefit provided by the agency.”

The company was then referred to the state’s Office of the Medicaid Inspector General and the Department of Labor, documents show. Crown of Life Home Care was not part of that investigation, according to the records provided by the city.

Neither company responded to a request for comment.

“Home health aides provide critical care for our most vulnerable, and they must be fairly compensated for their work,” said Attorney General James, in a release announcing the settlement. “Not only did these companies shamelessly cheat their workers, they also cheated our state and stole from communities that need it most.” The office declined further comment on a crackdown of unscrupulous companies in this industry.

The settlement comes as legislators and organizers in New York rally for proposed legislation called Fair Pay for Home Care, which would increase the minimum wage for this workforce by 150 percent.

Low wages in the industry have led to shortage of home health aides in the state, advocates say, making it difficult for people to receive care outside of an institutionalized setting. In 2021, 74 percent of individuals who are aging or living with disabilities were unable to retain a home care worker, according to a survey by the Consumer Directed Personal Assistance Association of New York State.

READ MORE: What’s Driving the Shortage of Home Healthcare Workers in NY? Low Wages, Advocates Say

On Wednesday, legislators and activists convened at the State Capitol War Room in Albany, with a 60-foot waiting list for home care, to demand that the proposed legislation be included in Gov. Kathy Hochul’s budget.

“The facts are clear: only permanent, fair wages will keep home care workers from continuing to flee the sector,” said Ilana Berger, co-director of nonprofit New York Caring Majority, in a press release. If New York pays home care workers a fair wage, the state could quickly wipe out the home care shortage, create hundreds of thousands of new jobs, and save the state money by moving home care workers off of social assistance.”

Liz Donovan is a Report for America corps member.