Homecare Business: Is Your Most Valuable Asset a Ticking Bomb?

Quality homecare for California seniors is a rapidly growing industry in response to the increasingly aging population and because it is a rewarding service. Homecare eases the burdens on the families caring for the elders and, most importantly, allows seniors to live in their homes as long as possible and to maintain their quality of life.

Yet, the industry has its challenges. Common issues include a high turnover rate in the caregiver pool, a lack of professionalism, poor attitude and even unlawful activity, any of which may cost a star homecare business its reputation, clients, or operating budget. California legislature recognizes that people 65 years and older are inherently more vulnerable to financial abuse. Statistics indicate that people over the age of 65 are targeted more heavily by financial predators. Over 70 percent of people over the age of 50 have been approached fraudulently, with no less than $3.8 billion lost by seniors to financial scams.1 California protects its seniors through various forms of legislation, including California’s financial elder abuse statute, Welfare and Institutions Code Section 15610.30.

A homecare business owner should know about this statute. If an employee causes financial loss by fraud or other bad faith conduct to a client who is 65 years or older, the employer may not only end up paying the elder’s losses, but also the elder’s attorney’s fees and costs, even if employer knew nothing of the employee’s “unfitness” for the job. If the employer knew of the wrongful conduct and consciously disregarded it, the business may be penalized with punitive damages. Examples of conduct which may give rise to employer liability include stealing from the elder, inducing the elder to loan the employee money or property, to give gifts, or to invest in the employee’s side business. The statute imposes liability regardless of the elder’s physical or mental capacity. Even a relatively small infraction by an employee may result in losses in tens of thousands of dollars, to say nothing of large or numerous claims.

Clearly, prevention is the key. Businesses that protect their clients protect themselves. Prevention starts with a legal audit of existing practices with regard to hiring the caregivers and training and educating them in the business’ policies and procedures. Once deficiencies are identified and corrected, next comes a rigorous implementation of such policies, including but not limited to regular oversight through customer feedback, meetings with employees and prompt investigation of any complaints. An honest litigator will tell you that the common stumbling blocks to paying for an audit and a set of working employment policies, of “time, cost and “we have never been sued (therefore it will never happen),”” pale in comparison to the time and cost of fighting disputes in court or paying judgments.

Experience shows that auditing hiring practices and properly training and supervising employees addresses problems before they come from the clients or their lawyers. And then your most valuable asset – your employees – ensure your stellar reputation, economic prosperity and much needed undisturbed sleep.

1 Elder Financial Abuse Task Team Report to the California Commission on Aging, available at http://www.ccoa.ca.gov/res/docs/pubs/Elder_Financial_Abuse.pdf (last visited August 27, 2013)

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