Elder care facilities are fast becoming an alternative to nursing homes. One of the main reasons for the shift is the lower cost. Elder care facilities do not employ the same level of skilled staff as nursing homes, but they can allegedly offer similar 24/7 peace of mind by monitoring those who need basic assistance and having someone readily available should something go wrong.
A shocking exposé by Reveal from the Center for Investigative Reporting upends this model of how elder care facilities keep costs down. After analyzing more than 1,400 wage theft cases and interviewing workers, operators and regulators, Reveal uncovered the systematic exploitation of care-home staff by profit-hungry owners.
Nothing Short of Human Trafficking
The tactics are low, even for an elder care industry that is known for rampant abuse. Workers, many of them in the country illegally, were wooed with false promises, treated reprehensibly and then intimidated into silence. Many were forced to work around the clock, sleep in hallways or patients’ rooms, only to have money docked from their paycheck for “lodging.”
Reveal reported 2 cases where care-home workers reported pregnancies to their employers and asked for days off. Both women were denied and kept on long shifts with heavy lifting. Both women had miscarriages.
“I was crying all night,” one told reporters. “I still have this dream that there’s a baby crying all the time. They treated us like animals.”
Getting into Healthcare for the Wrong Reasons
Unlike skilled nursing facilities, those working in residential care don’t need much training.
According to Reveal, which focused their investigation on California, administrators must take an 80-hour course and complete an open-book test. If there are fewer than 15 people in the facility, the manager need only have a high school diploma. Manicurists in the state, they note, are required to have much more training.
The relatively low barrier to entry has allowed many profit-hungry people to try their hand at healthcare. As one entrepreneur on YouTube explains, opening an elder care facility is an easy way “to turn a single-family home into a cash-flow machine.”
To accomplish this, unscrupulous owners are able leverage labor laws to their advantage. Reveal attended a seminar for care-home owners at which George Kutnerian, a lobbyist for the industry, explained the best way to keep costs down: Hire less caregivers at the facility and make sure they can’t leave. It’s all perfectly legal:
“‘There is no staffing ratio. A lot of people think, ‘I can’t have one caregiver alone.’ That’s not true,’ he advised.
‘You gotta learn how to use one caregiver,’ he said. Plus, there’s a ‘nice exception’ in state law, Kutnerian continued. Care homes with just one caregiver on duty can require that worker to stay for rest and meal breaks, he noted, adding: ‘If you have two caregivers there, they have to be able to leave. It’s more efficient, OK?’”
In what world is this perverse logic acceptable?
One would think that this behavior would be somewhat balanced by market forces — in other words, if families have options, they would never put their loved one in a home that operates this way.
Unfortunately, these crimes can continue for a long time without anyone finding out. In 2018, 4 members of the Gamos family, who ran a slew of elder care facilities in California, were charged with human trafficking and labor abuse for their treatment of immigrant workers. One member of the Gamos family was charged with 3 counts of rape.
Neighbors of the facility told ABC News that they “suspected nothing.”
Bad Owners Get Away with Crimes, Good Owners Go Out of Business
The world of senior care is far from transparent, but even when crimes are discovered by law enforcement, Reveal found that businesses simply shift their ownership or form under a new name. Such little legal maneuvers allow owners to rack up violations with little consequence.
One owner of multiple care-homes, Stephanie Costa, appeared on Bravo’s Millionaire Matchmaker as a fabulously wealthy 30-year-old. Three months later, Costa was accused of labor violations totaling $1.6 Million. Eventually, by filing for bankruptcy and having ownership rotate between her parents and herself, Costa was able to settle for around $200,000.
For decent people looking to get into the industry, it can be pretty hard to compete with the prices offered by owners like Costa. Reveal found that 20 companies guilty of wage theft are still operating illegally. The Department of Social Services’ (DSS) Community Care Licensing Division has yet to enforce penalties for such mistreatment of workers.
Without some sort of intervention, the worst owners will rise to the top. Employees will continue to suffer, and more seniors will be put at risk.
Find out more about the laws protecting elders in your state.