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Home Health Franchises Among Nation’s Most Profitable, USA Today Reports

May 10, 2012

Top home health franchises earn gross profit margins as high as 40 percent, making home care one of the five most profitable franchise ventures in the country, according to a report (pdf) by Franchise Business Review, a market research firm.

The report was highlighted in a recent USA Today article.

But despite these huge profits, the home health industry has spent hundreds of thousands of dollars fighting a proposed federal rule that would extend basic wage protections to home care workers.

Asked about this discrepancy by USA Today, PHI Policy Research Director Dorie Seavey said, “I find it really hard to reconcile that one of the most profitable sectors is pinching pennies when it comes to workers.”

Home health aides earned a median wage of $9.91 an hour (pdf) in 2011. Adjusting for inflation, that’s a 12 percent decline from their 2001 wages.

In December, President Obama proposed to end the “companionship exemption” in the federal Fair Labor Standards Act, which excludes home care workers from minimum-wage and overtime protections.

During a recent public-comment period, 26,000 comments on the proposal were submitted to the Department of Labor, of which three quarters were in support. Publication of a final rule could come as early as this summer.

— by Matthew Ozga

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