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Hundreds of California Small Home Care Facilities Warn of Closures in 60 Days, Potentially Leaving Thousands of Low-Income Residents Homeless and Thousands of Caregivers Jobless

State Blamed for Refusing to Recognize their Value by Drastically Underfunding their Services and Treating Residential Care Providers like Second Class Citizens and Outright Criminals

(Sacramento, CA) – 72 Cents Makes No Sense became the rallying cry today at the State Capitol as providers, family members and caretakers asked legislators: Isn’t the care of our frail elderly and disabled adults worth more than 72 cents an hour? That’s the meager pay 6-bed home care providers receive for taking care of low-income elderly and adult residents on Supplemental Security Income/State Supplementary Payment (SSI/SSP).

The 72 cents is the compensation given to 6-bed providers because inadequate state subsidies are capped well below the amount needed to pay caregivers over a 24-hour period, 7 days a week. Under federal and state mandates, providers are losing $73,000 per staff member each year. Meanwhile, overzealous government labor enforcers contend that this round-the-clock pay must be given to workers even when the lights are out and everyone is asleep; even when 6-bed caretakers prefer to receive daily 8-hour pay supplemented by fully paid lodging, meals, transportation, insurance coverage and other benefits.

“Many of us women, minority small home care owners rose from poverty and have been quietly contributing to the economy by providing for the most vulnerable and frail in our society at government compensation rates well below minimum wage,” said Janet Baena V., 6Beds, Inc. Northern California President. 6Beds, Inc. represents about 1,100 small home care facilities throughout California that have been providing an extended family home environment for the past 40 years to the needy, developmentally disabled and dependent elderly.

She added: “We treat each other like family living in the same household. And our caregivers are more than happy to have a roof over their heads and their living expenses fully paid by us along with daily wages, workers comp, taxes, Internet service and utilities. It takes 6 or more workers to cover all the shifts depending on our residents’ needs, one during the day, one at night and two often at the same time to watch six residents, along with weekend relievers and substitutes. But the government requires that we pay our regular staff 16 additional hours over their 8-hour shifts just because they’re living there. You do the math and tell us if we can afford to stay in business. And the answer is NO!”

The stark reality is the California residential home care industry that compassionately provides for developmentally disabled adults and seniors with dementia is on the verge of collapse. Yet instead of working with providers to find a solution to keep them afloat during these trying times, 6Beds, Inc. advocates say government labor zealots are raiding their homes, coercing caregivers to say things against their employers with rewards of getting millions in back pay, seizing homes in nice neighborhoods with lots of equity and accusing care home owners of wage theft and tax evasion. These out-of-control government raiders threaten minority women providers operating in the red due to the impossible demands placed on them to either pay up or be jailed. The providers have no recourse and are convicted with criminal penalties on their records, ruining their reputations and ability to find other employment.

Examples abound in many communities throughout California, some relayed at today’s rally:

  • Cynthia, a former auditor who owns four care homes in the Bay Area recently was hit with a $900,000 penalty, despite her best efforts to comply with the labor laws with proof of timesheets, paystubs, workers comp and payroll tax receipts. Now, she can’t sleep at night and cries because she feels helpless. She thinks the equity in her home made her a prime target.
  • Lucy, an 83-year-old, owned a well-run care facility for more than 20 years in San Francisco. She was tending to her ailing husband when labor auditors came to her door and fined her $600,000. With her husband sick during the time of the audit, Lucy was afraid and was forced to settle. She sold her primary residence, and her care home to scrape up barely enough money to pay the huge fines with the equity she had in her homes.
  • Kelly and her husband were slapped with over $1 million in penalties by federal labor auditors. The couple settled but Kelly’s husband could not handle the stress and died of a stroke just three weeks ago at the age of 61. Wasting no time, state labor auditors came knocking at her door, demanding a half a million dollars from the grieving widow. Kelly, on the brink of bankruptcy and alone, said the state enforcers threatened her with jail time if she did not settle.

“The government is trying to pit us against the loving caregivers we’ve embraced as family when the real defendant who should be on trial is the government,” said Baena V. “Our ability to comply with the labor laws depends on our residents’ ability to pay. How do we give something we DO NOT HAVE? State and federal labor departments demand 24 hours paid work for each caregiver. Shouldn’t it stand to reason that the government should be funding those 24 hours to providers of SSI/SSP recipients, who depend on government aid as their only source of income to care for these residents?”

“6Beds, Inc. supports compliance with the labor laws while at the same time, seeks a moratorium on the ongoing harsh labor audits until we can achieve an economic model that our low income residents can afford,” stated Ron Simpson, 6Beds, Inc. Southern California President.

“But until then, why uphold a labor law that the government can’t even comply with and then convict the citizen who is running a business the best she can. You, the Great State of California, are GUILTY of whatever the Department of Labor has coined ‘wage theft’ and ‘wage fraud.’ We may be small in size but we are strong in our resolve to fight this huge injustice and outright violation of our constitutional rights.”

17 March 2015 – State Capitol Rally Photos

One thought on “Hundreds of California Small Home Care Facilities Warn of Closures in 60 Days, Potentially Leaving Thousands of Low-Income Residents Homeless and Thousands of Caregivers Jobless

  1. Sally Reyes

    Hi! I have a question regarding meals and lodging schedules. If I were to credit this against their salary , do I deduct it after tax or before taxes? Please advise.

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