BILL ANALYSIS �
SENATE HUMAN
SERVICES COMMITTEE
Senator Jim Beall, Chair
BILL NO: AB 1863
A
AUTHOR: Jones
B
VERSION: June 16, 2014
HEARING DATE: June 24, 2014
1
FISCAL: Yes
8
6
CONSULTANT: Sara Rogers
3
SUBJECT
Home Care Services Consumer Protection Act
SUMMARY
This bill establishes "domestic home care aide referral
organizations" as a new licensure category under the Home
Care Services Consumer Protection Act overseen by the
California Department of Social Services (CDSS). It
requires newly licensed entities to undergo a criminal
record clearance, to post their licenses in a conspicuous
place, to comply with existing bond requirements, to act as
mandatory reporters, and provides that all home care aides
shall be listed on the CDSS home care aide registry prior
to being referred to a client.
ABSTRACT
Existing Law:
1.Enacts the Home Care Services Consumer Protection Act
pursuant to AB 1217 (Lowenthal) Chapter 790, Statutes of
Continued---
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageB
2013, which provided for the licensure and regulation of
home care organizations, as defined. (HSC 1796.10 et
seq.)
2.Requires CDSS to establish and maintain a home care aide
registry on the department's internet website to include
the registrants name, registration number, registration
status, and registration expiration date. (HSC 1769.29)
3.Defines "home care organization" as an individual, 18
years of age or older, firm, partnership, corporation,
Limited Liability Company, joint venture, association, or
other entity that arranges for home care services by an
affiliated home care aide to a client, and is licensed.
(HSC 1796.12)
4.Defines "home care services" as nonmedical services and
assistance provided by a registered home care aide to a
client who, because of advanced age or physical or mental
disability cannot perform these services and provides
that the Act shall not authorize a registered home care
aide to assist with medication that the client
self-administers that would otherwise require
administration or oversight by a licensed health
professional. (HSC 1796.12)
5.Defines "affiliated home care aide" to mean an
individual, 18 years of age or older, who is employed by
a home care organization to provide home care services to
a client and is listed on the home care aide registry.
Defines "independent home care aide" to mean an
individual, 18 years of age or older, who is not employed
by a home care organization but is listed on the home
care aide registry. (HSC 1796.12)
This bill:
1.Defines "domestic home care aide referral organization"
(DHCARO) to mean an employment agency which is not the
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageC
employer of a domestic worker but which offers, refers,
provides or attempts to provide work to a registered
domestic home care aide. Additionally states the DHCARO
provides no training, direction, supervision, tools,
supplies or equipment to the registered home care aide.
(Definition refers to HSC 1796.12 and CIV 1812.5095)
2.Amends the current definition on "home care aide
registry" to include information regarding the DHCAROs
with which the registered home care aide is associated.
3.Defines "registered home care aide" to mean an affiliated
home care aide or independent home care aid, 18 years or
older, who is listed on the CDSS home care aid registry.
4.Requires an "independent home care aide" to be listed on
the department's home care aide registry prior to
providing home care services to a client
5.Provides that the CDSS-maintained internet website
containing the home care aide registry shall distinguish
between affiliated and independent home care aides for
purposes of informing potential customers and the public
about the differences between the two classifications.
6.Requires a licensee for a DHCARO to submit an application
providing identification, as specified, and to consent to
a criminal background examination.
7.Provides that only licensed DHCAROs may be represented as
such.
8.Requires a DHCARO that has its principal place of
business out-of-state shall have an office in California
and maintain all pertinent records regarding California
operations at that office.
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageD
9.Requires a DHCARO to maintain general and professional
liability insurance in an amount of $1,000,000 per
occurrence and $3,000,000 in the aggregate.
10.Requires the department to issue a license to a DHCARO
applicant that applies, passes a background examination,
provides proof of general liability insurance and
compliance with existing bond requirements, and has no
outstanding fees or civil penalties.
11.Requires, instead of permitting, CDSS to issue a license
to a home care organization that meets the above and
additional requirements, including the provision of a
list of affiliated home care aides and evidence of a
valid workers compensation policy covering affiliated
home care aides.
12.Requires DHCARO licenses to be renewed every two years
and permits providers to obtain multiple licenses.
13.Requires a DHCARO to do all of the following:
Post its license in a conspicuous location.
Report any suspected of known adult abuse or
child abuse, as specified.
Provide clients with written information
regarding the types and hours of available services,
the fees associated with those services and a
disclosure that services may or may not be a covered
benefit through Medicare or Medi-Cal.
Comply with bond requirements that are in
existing law.
Orally communicate to the person seeking home
care aide services the disclosure with specified
language.
Within three business days mail a statement
with specified language, printed in at least 10
point type and in bold or italic to the person
seeking domestic services.
In any paid advertising brochure or on the
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageE
internet website of the DHCARO insert a specified
statement that the organization is a referral
agency.
Provide a statement of payments made on behalf
of the client to the registered home care aide
through the DHCAROs trust account, upon receipt of a
written request from a client.
Ensure that home care aides are cleared on the
home care aide registry prior to having direct
contact with clients and are free of active
tuberculosis disease, as specified.
Immediately notify CDSS with the DHCARO no
longer has a relationship with an independent home
care aide.
1.Requires a home care aide that is being referred by a
DHCARO to do both of the following:
Demonstrate proficiency, by completing an
annual proficiency exam that includes the following
topics:
i. Clients' rights and safety.
ii. Activities of daily living, as
specified.
iii. How to detect, report and prevent
abuse and neglect.
iv. Assisting clients with personal
hygiene
v. Safely transporting clients, if
applicable.
vi. Infection control.
vii. Basic safety precautions.
Provide verifiable work references
demonstrating that the home car aide has the
necessary work experience to provide home care
services.
1.Requires that the proficiency exam include
department-approved, job-related topics described in this
subdivision and may be provided via an online proficiency
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageF
examination or a written proficiency examination
administered by the DHCARO or their designee.
2.Requires a DHCARO to pay the following fees:
A 24-month initial license fee and a two-year
renewal fee in an amount sufficient to cover the
reasonable costs of administering the program, as
specified.
Other reasonable fees as determined by CDSS.
1.Permits CDSS to establish procedures for the receipt,
investigation and resolution of complaints against a
DHCARO. Requires CDSS to verify through random,
unannounced inspections that a DHCARO meets the
requirements of licensure.
2.Delays the effective date of the Home Care Services
Consumer Protection Act by one year to January 1, 2016.
FISCAL IMPACT
An Assembly Appropriations analysis estimates there would
be ongoing costs to CDSS of $100,000 (GF) associated with
adding 200 to 300 licenses to the Home Care Services
licensure structure established in AB 1217, noting that
these costs might be partially offset by licensing fees.
BACKGROUND AND DISCUSSION
According to the author, last year the state enacted a
series of consumer protections for persons seeking home
care services from agencies that employ workers, but not
from referral agencies that refer independent workers to
clients that are seeking home care services. The author
states that this bill will extend similar protections
enacted by last year's AB 1217 to the referral home care
agency, consistent with model's statutory framework and
with Employment Development Department (EDD) and Internal
Revenue Service (IRS) requirements which govern independent
workers. The author additionally states that the entire
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageG
industry, not just the employer-based model, should have
access to the proverbial "good housekeeping seal of
approval" accorded the employer based model through
licensure by CDSS.
Home Care Industry
As the private-pay corollary to the In Home Supportive
Services Program (IHSS) which serves Medi-Cal eligible
consumers, home care aides provide non-medical assistance
to clients who live at home, as well as assistance with
activities of daily living, such as cooking, cleaning,
dressing, feeding, and other regular daily needs. Last
year, California passed the Home Care Services Consumer
Protection Act,<1> which provided for the licensure and
regulation of "home care organizations" that directly
employ aides and established the registration of home care
aides who are directly employed by these organizations.
Under this law, home care organizations must ensure that
staff have received background clearances, been screened
for tuberculosis and have received a minimum amount of
training prior to providing care to a client.
This law did not provide for the licensure of domestic home
care aide referral organizations (DHCAROs) which are a form
of employment agency that refers home care aides to
prospective clients, but does not directly employ the aides
and is not permitted to train, supervise or monitor the
care provided, nor provide any tools, equipment or supplies
to the aides. Under the DHCARO model, consumers typically
establish "trust accounts" to make payments to the agency
trust, instead of making two separate payments to the home
care aide and to the referral agency. The referral agency
then collects its fee and pays the worker's wages from the
trust, providing the worker with an IRS 1099 as an
independent contractor.
Last year's bill provided for the voluntary registration of
-------------------------
<1> AB 1217 (Lowenthal) Chapter 790, Statutes of 2013.
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageH
unaffiliated persons providing home care services, but it
did not prohibit the provision of such services without
registration. Any individual can solicit home care
services, and while individual private consumers are
permitted to access background check processes used for
child care and IHSS, many consumers may not be aware of
that right. This bill requires DHCAROs to be licensed and
its referred aides to be registered. It does not prohibit a
consumer from hiring a home care aide directly, nor does it
require that all such home care aides be registered.
Tax liability for consumers
Federal and state laws require employers to withhold
certain taxes from an employee's wages including state
disability insurance (SDI), personal income taxes (PIT),
and Federal Insurance Contribution Act (FICA) taxes, which
fund Social Security and Medicare. Failure to comply with
these employer responsibilities can lead to significant
penalties, including both jail and civil penalties.
Under the referral model, the referral agency provides the
worker with an IRS 1099 form indicating the intent for the
worker to be viewed as an independent contractor. However,
existing state law requires that proof of independent
contractor status meet certain criteria including that the
contractor:<2>
Has the right to control and discretion as to the
manner of performance of the contract for services;
Is engaged in an independently established
business;
Has control over the time and place the work is
performed.
Supplies the tools or instrumentalities used in the
work other than tools and instrumentalities normally
and customarily provided by employees
That the relationship is not severable or
-----------------------
<2> Labor Code Section 2750.5
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageI
terminable at will by the principal but gives rise to
an action for breach of contract.
If such criteria are not met, home care aides may be
considered to be "household employees" and, according to
the EDD, the consumer bears the responsibility of acting as
the employer for tax purposes. Once a consumer pays more
than $750 in cash wages in a quarter, he or she is required
to register with EDD within 15 days.<3> Existing law
requires the referral agency to disclose to the consumer
that he or she may bear employer responsibilities for tax
purposes, but does not provide detailed information about
the amount of wages paid to the employee for which the
consumer may be liable to pay employer taxes. The sponsor
states that the employment relationship between a consumer
and the home care aide is structured in a manner such that
the aide may be classified as an independent contractor.
The opposition to this bill states that such
classifications are often improper, and cite a complaint
filed on June 3, 2014 with the United States District
Court, "Anderson et. al. v Griswald International LLC," in
which franchisees of Griswald International allege they
were misled by the parent company which had told them that
the referral model conferred a competitive advantage by in
classifying home care aids as independent contractors. The
suit alleges that, contrary to Griswald's claims, "the
classification of caregivers as independent contractors has
been under attack for several years throughout the United
States by labor and employment departments, including the
California Employment Development Department (EDD), and
federal agencies such as the Department of Labor and the
IRS?"
Local Ordinances
In 2011, Napa County passed a county ordinance requiring
-------------------------
<3> Employment Development Department. 2014 Household
Employers Guide.
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageJ
home care aides to undergo a background check and to carry
a "Caregiver Permit." The ordinance was passed at the
county level and then ratified by each of the five cities
in the county. Under the ordinance, providing care to an
elder or dependent adult without a permit is punishable as
a misdemeanor or infraction, and subject to a fine, one
year imprisonment in county jail, or both. Similar measures
are under consideration in additional counties.
Fees associated with obtaining the permit in Napa County
include a $90 processing fee upon submission of the
application and an additional $20 permit fee at the time
the permit is issued. Subsequent renewal fees are $79 the
first year and $69 each year following. Disqualifying
crimes include felony convictions within the past 10 years,
certain misdemeanor convictions, and being on active parole
or probation in any county.
Criminal Record Clearance Process
The Home Care Services Consumer Protection Act applies the
existing background check standards applicable to other
licensed community care facilities to home care
organizations and registered home care aides. Under this
standard, an individual is barred from providing care if he
or she has had a criminal conviction for any crime other
than a minor traffic violation, unless the department
issues an exemption to the individual. By state law, the
director is prohibited from granting exemptions of more
than 58 Penal Code convictions including:<4>
All crimes that require registration pursuant to
the Sex Offender Registry Act including lewd and
lascivious conduct with a child, child pornography,
sexual battery, rape, sexual exploitation of children,
and others.
Child abuse under conditions likely to produce
-----------------------
<4> Health and Safety Code Section 1522. See also
"Non-Exemptible Crimes. Revised 4/10"
http://www.ccld.ca.gov/res/pdf/non_exempt.
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageK
great bodily harm or death, torture, kidnapping.
Cruel and inhumane corporal punishment on a child.
Elder abuse.
Drawing, exhibiting or using a firearm or deadly
weapon on the grounds of a day care center.
Attempted murder.
Arson with great bodily injury.
Any felony punishable by death or life in prison
without parole.
Weapons of mass destruction.
Because the evidentiary standard for the denial of a
department clearance is lower than that of the criminal
court, the standard provides that an individual who has
ever been arrested for the following crimes also be
investigated by the department:
Crimes that require registration pursuant to the
Sex Offender Registry Act.
Assault with a deadly weapon or firearm.
Felony/misdemeanor domestic violence.
Felony/misdemeanor child abuse under conditions not
likely to produce great bodily harm or death.
Any crime for which the department cannot grant an
exemption (see above).
In investigating arrest-only circumstances, the department
may evaluate whether a conviction was avoided due to the
refusal or inability of a victim to testify or whether
there was substantial evidence of guilt that fell short of
the "beyond a reasonable doubt" standard necessary for
incarceration. Since all home care aides working for
DHCAROs would be required to pass this criminal record
check, it is unclear how many currently employed
individuals may be excluded from providing care.
Elder Abuse and Home Care Providers
Overall, there is little published research on the
prevalence of elder abuse inflicted by non-medical home
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageL
care aides. A 2011 report published by the California
Senate Office of Oversight and Outcomes provides an
anecdotal review of elder abuse incidents occurring in the
growing home care industry. It highlights the absence of
routine background checks for caregivers unaffiliated with
a home care agency (who often advertise through online
websites such as Craigslist) and the lack of effective
background checks by some home care agencies.
The report notes that most Californians are unaware of
their right to request a background check from the
Department of Justice, and to request assistance from their
local public authority in obtaining background checks on
prospective caregivers when those services are privately
purchased. It also notes that public authorities themselves
were unaware of their statutory role to assist private
purchasers of home care services.
According to the report, effective criminal record
screenings of home care aides would help protect consumers,
since "more than a quarter of caregivers accused or
convicted of crimes that we identified from news accounts
had committed previous offenses." Anecdotally, the report
describes numerous cases of caregivers stealing personal
property and money, the value of which ranged from tens of
thousands to even hundreds of thousands of dollars, from
consumers who were unaware of their ability to request and
receive a criminal background check on prospective aides.
In 13 of the 17 cases, the offender had a prior criminal
record. Additionally, the report reviewed the criminal
histories of potential caregivers advertising on Craigslist
and found multiple caregivers who had committed commercial
burglary, narcotics trafficking and prostitution.
The report anecdotally describes several court cases
involving elder abuse perpetrated by home care aides
employed by home care agencies whose background checks and
screens were incomplete. While some home care agencies are
certified through their private association, the California
Association for Health Services at Home, the report states
that more than 80 percent of agencies are not.
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageM
IHSS program
California's In Home Supportive Services (IHSS) program is
the state's primary community-based long-term care
provider, providing in-home domestic and personal care
services for 448,000 aged, blind or disabled individuals
living at or below the poverty level. The purpose of IHSS
is to enable seniors and persons with disabilities to
remain safely in their homes and avoid institutional care
through the provision of a specified number of assistance
hours provided by a home care worker under the direction of
the consumer. The program is administered locally by
counties and county public authorities under the direction
and regulation of CDSS. In order to qualify as a provider
under the program, a prospective caregiver must submit to a
criminal background check, as specified, and complete an
initial orientation. There are approximately 386,000
providers.
Opposition arguments
The California Association for Health Services at Home
writes in opposition to this bill that when DHCAROs refer
home care workers, consumers and their families are often
unaware of their responsibilities as household employers.
CAHSAH states the confusion is further exacerbated by "a
very limited set of Employment Agency regulations in Civil
Code." The opposition seeks an amendment to this bill
requiring DHCAROs to provide clients with a quarterly
statement of payments made on behalf of the client to the
registered home care aide through the DHCAROs trust
account. The sponsor has accepted an amendment to provide
such information upon receipt of a written request from a
client; however this does not remove CASAH's opposition to
the bill.
Current/Related legislation:
SB 855 (Committee on Budget) 2014 includes substantial
revisions to the Home Care Services Consumer Protection
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageN
Act. This bill was passed by the legislature and is under
the Governor's consideration.
AB 1217 (Lowenthal) Chapter 790, Statutes of 2013 enacted
the Home Care Services Consumer Protection Act providing
for the licensure and regulation of home care
organizations, as defined.
COMMENTS
1.This bill has substantial overlap with trailer bill
language proposed by the Governor, which enacts clean up
to last year's AB 1217 and which delays implementation of
the Act until 2016. Should the legislature adopt the
governor's proposal, or a form of it, this bill will
amend statutory changes adopted in the budget and would
additionally require substantial amendments.
2.The author has amended the bill to provide clients with a
quarterly statement of payments made on behalf of the
client to the registered home care aide through the
DHCAROs trust account upon receipt of a written request
from a client. Staff notes that the client may be unaware
that he or she may request such information. Staff
recommends the bill be amended under Section 1796.41
(page 16) of the bill to include in the notification
provided for under paragraph (3) additional notice that
this information may be requested in writing from the
DHCRO.
Specifically, staff recommends the following amendments:
Page 16, Lines 1-18
(3) Within three business days after the domestic home
care aide referral organization refers a registered home
care aide to the person seeking home care aide services,
mail the following statement, printed in not less than
10-point type and in bold or italic, to the person
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageO
seeking domestic services:
"(Name of the referral organization) is not the employer
of the domestic worker it referred to you. The domestic
worker may be your employee or an independent contractor
depending on the relationship you have with him or her.
If you direct and control the manner and means by which
the domestic worker performs his or her work, you may
have the responsibilities of an employer, including
employment taxes and workers' compensation, under state
and federal law. You may request in writing for (Name of
the referral organization) to provide you with a
statement of payments made on your behalf to assist you.
For additional information contact your local Employment
Development Department and the Internal Revenue Service.
(Name of referral organization) is a referral agency and
does not employ, control, or train any home care aide it
refers."
3. Page 19, Lines 1-3
(B) Provide verifiable work references demonstrating that
the line 2 home care aide has the necessary work
experience to provide home line 3 care services.
PRIOR VOTES
Assembly Floor 54 - 5
Assembly Appropriations 14 - 0
Assembly Human Services 5 - 0
POSITIONS
Support: A Better Living Home Care Agency
A Better Way in Home Care, Inc.
Affordable Home Care Agency of California,
Inc.
STAFF ANALYSIS OF ASSEMBLY BILL 1863 (Jones)
PageP
A Hand at Home Domestic Referral Agency
Anita's Housekeeping Referral Agency
Caring Hands of the Desert Employment
Agency, Inc.
Clean Sweep Housekeeping Agency, Inc.
Cleaning Services Referral Agency, Inc.
Dana's Housekeeping Personnel Service
ElderCaring
HomeHero
Howard's House Cleaning Referral Agency
JB Homecare
Jaqueline's Maids, Inc.
Maid America
Maid in America Domestic Referral Agency
Network of Domestic Referral Agencies
1 Plus 1 Senior Care
Panda's Domestic Referral Agency
Panda's Referral Agency
Senior Homecare Referral Agency
Sparkle Clean Agency
Weekend Maids Referral Agency
Oppose: California Association for Health Services at
Home
Care 4 You in Home Care
Care to Stay Home
Comfort Keepers
Hillendale Homecare
Home Instead Senior Care
Matched CareGivers
ResCare
Starlight Caregivers
-- END --