Investing in New York’s Home Care Workforce: Progress and Challenges in Raising Wages

As a national organization committed to strengthening the direct care workforce, PHI has long advocated for policies that improve job quality and compensation for home care workers (among other direct care workers). In 2022, New York State took a significant step in the right direction by including a $7.7 billion investment in higher minimum wages for home care workers in the state budget. Although representing a critical acknowledgment of the value of this workforce, implementation of this wage policy has fallen short of achieving the transformative change needed to address the state’s severe home care workforce shortage.

PHI’s latest policy brief, Investing in the Home Care Workforce: A Brief Analysis of New York’s Home Care Minimum Wage Increase, delves into the origins, implementation, and impacts of this significant policy change. Here’s a snapshot of our findings and recommendations:

A Growing Workforce Facing Persistent Challenges

New York’s home care workforce, numbering more than 566,000 workers in 2023, is projected to add nearly 200,000 new jobs by 2030—more new jobs than any other occupation in the state. This workforce, predominantly female (88%), people of color (81%), and immigrants (65%), provides critical support to older adults and people with disabilities, enabling them to live independently in their communities.

Despite their essential role, home care workers face significant economic challenges. With a median wage of just $17.52 per hour and median annual earnings of about $25,000, more than one in three New York home care workers live in or near poverty, and 60% rely on public assistance programs.

The Minimum Wage Increase: One Step Forward, Another Step Back?

Against the backdrop of years of advocacy, including advocacy around the proposed Fair Pay for Home Care Act, New York lawmakers invested in a $3.00 minimum wage increase for home care workers in the FY 2023 budget, to be phased in over two years.

While the new minimum wage policy represented important progress, several issues arose during implementation:

1. Inequitable Impact: The second phase of the minimum wage increase was delayed—and then offset by a reduction in supplemental compensation required by the 2012 Wage Parity law. This effectively canceled out the wage increase for many downstate workers who receive this supplemental compensation in cash rather than benefits.
2. Inadequate Reimbursement: The wage increase was not paired with robust rate analyses to ensure that reimbursement rates adequately cover higher wages and related costs—leading to concerns that agencies may reduce other benefits to comply with the new wage floor.
3. Lack of Transparency: There has been little consistent communication about the wage increase and there are no clear plans in place to evaluate its implementation or impact on workers’ financial well-being, workforce stability, or care delivery.
4. Overemphasis on Cost Containment: The revised implementation of the wage increase, along with other recent policy changes, reflects a short-sighted focus on cost containment that may actually worsen the home care workforce crisis over time.

Recommendations for New York State

To address these challenges and truly support the home care workforce, this new PHI policy briefs ends with six actions for New York and beyond:

1. Enact and fully fund legislation, such as the Fair Pay for Home Care Act, establishing livable and competitive wages for home care workers.
2. Set and fully fund baseline rates that managed long-term care plans must pay providers to cover all labor costs.
3. Commission an evaluation study on the implementation and impact of the recent home care minimum wage increase (or other wage policies in other states).
4. Improve direct care workforce data collection to better inform policy decisions.
5. Establish a direct care workforce task force to address the multiple factors driving workforce shortages.
6. Strengthen, fund, and implement direct care workforce recommendations in New York and other states’ Master Plans for Aging.

Conclusion

While New York’s attempt to raise the floor on home care workers’ wages is commendable, our brief discusses how the implementation has fallen short of securing quality jobs for these essential workers. The brief ends by asserting that, as a national leader in long-term care policy, New York must recommit to supporting and investing in direct care workers. This commitment is crucial for supporting quality jobs, ensuring access to much-needed care, and strengthening the economy for all New Yorkers.