
Analysis of the Potential Impacts of Statewide or Regional Collective Bargaining for In-Home Supportive Services Providers
Press Coverage
Final Report to California Department of Social Services
Executive Summary
This report investigates the potential impacts of shifting collective bargaining for California’s In-Home Supportive Services (IHSS) providers from the county level to the state or regional level. IHSS is a crucial Medi-Cal entitlement program that delivers home care services to more than 700,000 disabled, aged, and blind Californians, primarily through the Individual Provider mode in which individuals hire their caregivers—often family members. Since 1999, IHSS providers have had the right to unionize and engage in collective bargaining with county-level IHSS Public Authorities acting as employers of record. These workers are currently represented by the Service Employees International Union (SEIU) and United Domestic Workers (UDW).
Recent legislation, AB 102 (2023), mandates an analysis of the implications of transitioning to statewide or regional bargaining, including fiscal implications and human impacts. The California Department of Social Services (CDSS) contracted with the UC Berkeley Center for Labor Research and Education (Labor Center) to conduct part of this analysis, encompassing the potential impact on workforce recruitment and retention, implications for the county–state Realignment structure, how wage increases would interact with statewide minimum wage adjustments, and possible funding sources to implement statewide or regional collective bargaining for IHSS providers.
To conduct this analysis, we reviewed and analyzed a wide array of data sources: current IHSS union contracts; CDSS administrative data on IHSS wages and benefits and program utilization; existing research on provider retention and health outcomes from wage improvements and provider training; and practices in six states with statewide collective bargaining of home care workers. Observations from nine CDSS stakeholder meetings held between April and September 2024, along with interviews with participants, were used to gather insights. Finally, we analyzed CDSS baseline program cost projections and estimates of the impact of wage increases and partnered with Blue Sky Consulting to assess how IHSS program growth aligns with 1991 Realignment revenues, the primary source of funding for county obligations to IHSS.
Key Findings, By Report Section
I. Introduction
This section describes the purpose of the study and provides background on the IHSS program, IHSS collective bargaining, and program financing.
II. IHSS Labor Market Analysis
This section provides an examination of the demographics and socioeconomic conditions of IHSS providers in California. We also summarize the variability in wages and benefits across different counties that have resulted from the current system of collective bargaining and consider the implications in the context of the statewide home care labor shortage.
IHSS providers are predominantly female and care for relatives. More broadly, home care workers are predominantly workers of color, and one half were born outside of the United States.
- Three in four IHSS providers are women, about one in four speak a language other than English, and seven out of ten care for a relative.
- According to Census data, California home care workers more broadly are predominantly female, about one in two are foreign-born, and nearly three out of four are workers of color, with significant representation by Hispanic, Asian American and Pacific Islander, and Black individuals.
- IHSS providers—and home care workers more broadly—who are employed year-round earn less than half as much as all workers in California. Census data show home care workers are more than twice as likely to experience poverty. They are also more likely to work part-time and have lower levels of formal education.
IHSS wages and benefits vary significantly among counties.
- IHSS provider wages range from $16.00 to $21.50 per hour, with an average wage of $18.13 (as of July 2024).
- MIT’s Living Wage Calculator estimates a single adult employed full-time and year-round would need at least $27.32 per hour to cover basic living expenses such as housing, transportation, food, and health care in California. Comparing IHSS provider wages to county-level MIT Living Wage estimates shows that no county offers wages high enough for a single adult to be self-sufficient.
- Health benefits are offered to at least some workers in 28 out of 58 counties, and nearly 110,000 providers, or 16 percent of all IHSS providers, receive these benefits. Two thirds (67 percent) of IHSS providers enrolled in health benefits work in Los Angeles, San Francisco, or Santa Clara Counties.
- In addition to setting wages and benefits, county MOUs contain a variety of terms of employment related to union representation, recipient and provider rights, and provisions that relate to IHSS Public Authority and county responsibilities, such as registry administration.
III. Collective Bargaining in Other States
We examine collective bargaining practices in other states with Medicaid-funded consumer-directed home care programs. Our analysis highlights the different bargaining structures, wage rates, and benefits offered to home care workers in these programs, as well as the advantages of statewide bargaining for creating uniform standards and facilitating large-scale changes.
Other states with Medicaid-funded consumer-directed home care programs have statewide bargaining with varied structures.
- Connecticut, Illinois, Massachusetts, Minnesota, Oregon, and Washington have Medicaid-funded consumer-directed home care programs and union-represented Individual Providers.
- The programs in these six states are much smaller than IHSS, and several limit enrollment and access to services. They are generally administered by the state government and do not involve local government funding.
- In two of these states, unions bargain directly with one or two state agencies; in three states, unions bargain with councils and commissions. Washington has a unique model with a private vendor as the employer for Individual Providers and a rate-setting board that recommends the rate for that vendor.
- In five of these states, starting wages for Individual Providers will be higher than wages for the vast majority of California IHSS providers as of January 1, 2025. Other states’ home care programs have varied health insurance benefits, along with other benefits like paid time off, retirement programs, and workers’ compensation.
- Interviewees in these states reported that opportunities with statewide bargaining included having consistent standards statewide, enabling significant structural changes that are more easily implemented at the state level, and improved efficiency.
IV. Potential Impacts of State-Bargained Wage Increases on Provider Retention and Quality of Care
This section explores the potential human impacts of statewide bargaining, specified in AB 102 in terms of home care worker turnover and retention and recipients’ access to services. We review existing research on the effect of wages and benefits on home care worker turnover and retention and examine how pay, benefits, and continuity of care influence the quality of care provided to service recipients.
There is a strong link between home care worker pay and benefits, turnover/retention rates, and quality of care. The impacts of statewide or regional collective bargaining on workforce turnover/retention and consumer access to care are contingent on bargaining outcomes.
- Research on IHSS providers in California and home care workers across the United States indicates that higher wages, particularly in relation to local low-wage benchmarks, are strongly correlated with reduced turnover and increased retention, especially among non-family caregivers. High-quality health benefits are also associated with increased retention.
- Existing research also shows that increased continuity of care through consistency of caregivers leads to improved health outcomes and greater satisfaction among service recipients.
- Based on the above research and the current ratio of non-relative providers, each $1 increase in IHSS provider compensation above baseline projections could decrease program-wide turnover by 2.0 percent across California as a whole.
- Analysis of IHSS payroll system data indicates that program-level annual turnover was 16.8 percent in 2023. The likelihood of leaving IHSS is more than twice as high among non-relative providers as among relative providers: 28.1 percent and 12.7 percent, respectively. Turnover increased significantly in 2022 and 2023, in contrast to 2017-2021 when turnover decreased slightly.
- The potential impact of regional or statewide collective bargaining on IHSS provider turnover and consumer access to care is contingent on the ability of unions and workers to negotiate wages and benefits higher than under the status quo, which is discussed in Section V.
- Other states with statewide bargaining tend to offer significantly higher wages for home care providers compared to county-bargained IHSS wages in California, but their programs are significantly smaller.
V. Potential Impact of Statewide Collective Bargaining on Program Cost
This section focuses on the cost implications of statewide or regional collective bargaining. We analyze CDSS projections on the fiscal impact of IHSS wage growth under a baseline scenario and with wage increases in $1 increments. We analyze the interaction between minimum wage adjustments and provider wages. We also project future service cost growth and assess how collective bargaining could reshape wage disparities across counties.
IHSS wages have seen significant growth recently. Future wage growth under potential statewide bargaining will depend on the state budget, union negotiation capabilities, and regional cost-of-living disparities.
- In all but two counties, IHSS wages are set as a supplement on top of the minimum wage. When the minimum wage was rising rapidly to $15, IHSS wage growth closely tracked minimum wage growth. Since 2022, the minimum wage has been adjusted annually by the Consumer Price Index, up to 3.5 percent a year. Between 2023 and 2024, IHSS wages grew much faster than the minimum wage.
- CDSS projects baseline IHSS service cost growth rate of 8.56 percent between FY 2027-28 and FY 2031-32. This estimate assumes 3.1 percent annual wage growth, inclusive of minimum wage adjustments, compared to the 7.7 percent average growth rate between 2018 and 2024.
- If statewide bargaining is implemented, each $1 across-the-state compensation increase is estimated by CDSS to cost $586 million (4.2 percent) more than the projected baseline in the first year (FY 2027-28), rising to $721 million in FY 2031-32.
- The impact of statewide bargaining on IHSS wage growth is not predetermined. Key determining factors of wage growth under statewide bargaining would include the state budget context, workers’ capacity to negotiate higher wages through their unions, and the ability of the state and IHSS stakeholders to identify new revenue sources.
- Given existing research on the wage compression effects of unionization—especially under centralized collective bargaining—and IHSS unions’ stated intentions to raise the wage floor for the lowest-paid providers in the state, intra-state and intra-regional wage disparities are likely to narrow under statewide or regional bargaining.
VI. Implications for MOE and Realignment
In this section, we focus on the potential impacts of statewide collective bargaining on the Maintenance of Effort (MOE) and 1991 Realignment.
Statewide collective bargaining would require changes to the MOE. At the same time, the potential cost implications of statewide collective bargaining for MOE and 1991 Realignment are overshadowed by the existing long-term challenge of funding a rapidly growing IHSS program.
- Statewide collective bargaining would necessitate a change in the MOE, which is currently predicated in statute on local collective bargaining. Though operationally unwieldy, regional collective bargaining under a multi-county coalition bargaining model could theoretically continue under the current MOE.
- County costs for IHSS have grown significantly faster than 1991 Realignment revenues, 6.5 percent vs. 4.6 percent between FY 2017-18 and FY 2024-25.
- Results of the 1991 Realignment projection model developed by Blue Sky Consulting using sales tax growth trends and baseline cost projections from CDSS indicate that County MOE will continue to grow faster than the rate of Realignment revenue growth under the status quo of county-level collective bargaining, even with modest real wage growth.
VII. Potential Sources of Funding for Statewide Bargaining
This section examines funding options to support increased costs from statewide or regional bargaining in the IHSS program. We consider sources like the state General Fund, federal Medicaid funding, and Realignment as possible contributors to cover increased expenses.
Several funding sources could be considered to cover any increased state or county costs incurred due to statewide or regional bargaining.
- It is unknown whether regional or statewide collective bargaining will likely lead to faster wage and benefit growth compared to the status quo and how counties’ level of responsibility for the non-federal share of costs will change, if at all.
- The state IHSS share has historically been paid for out of the General Fund, and any increase due to bargaining would need to be considered by the governor and legislature in the context of the state budget.
- New state revenues could also be considered, but it is beyond the scope of this research study to detail those options.
- 1991 Realignment revenues are likely to grow at a slower rate than overall non-federal IHSS expenditures, regardless of whether bargaining is at the county, regional, or state level.
- If federal funding for Medicaid home- and community-based services increases permanently, as temporarily occurred in recent years due to federal COVID relief laws, those additional federal dollars could be used to support any increased spending due to statewide/regional bargaining or program growth.