The National Labor Relations Board established the new joint-employer standard under a rule that takes effect for all employers — including both those with and without union employees — on Feb. 26, 2024. Not only does the new joint-employer rule significantly broaden the board’s definition of “employer,” it also increases potential liability and exposure for facilities when they engage staffing agency caregivers or other third-party workers.

Critically, under the new rule, the board can find that a facility is a joint employer with another entity under many circumstances. This may include circumstances where a facility reserves some authority to determine an essential term or condition of employment for the outside caregivers or workers, even if the facility never exercised such authority, or where a facility exerts so-called “indirect control” over the workers’ working conditions.

The board will apply the new joint-employer rule when investigating unfair labor practice charges and union election petitions, as well as when determining whether an entity has any potential collective bargaining obligations. The board’s actions also are watched carefully by other state and federal agencies that investigate and address employment-related issues, such as agencies responsible for handling employee wage payment and unemployment compensation claims and employer tax collection. The board’s new rule may result in other agencies expanding their similar rules for finding joint employer liability.

The development of this new joint-employer rule is just the most recent step in a long history of back-and-forth changes that seem to happen under each change in presidential administrations.  

Most recently, the board under the Trump administration issued a formal rule in 2020 that included a more employer-friendly joint-employer test. That 2020 rule reestablished a narrower threshold for determining joint-employer status under the NLRA, requiring parties trying to prove such liability to show that an employer exercised “substantial direct and immediate control” over workers’ terms and conditions of employment. 

However, soon after changes to the board’s make-up that occurred under the current Biden administration, the board began taking steps that resulted in the new rule that goes into effect on Feb. 26 — assuming there are no successful legal challenges that stop its implementation.

How it works

Once in effect, the board will find a joint-employer relationship if the “employers share or codetermine those matters governing employees’ essential terms and conditions of employment.” 

Sharing or codetermining working conditions will include both reserving the right or having authority to control or actually controlling any of the employees’ essential terms and conditions of employment. Essential terms and conditions of employment include: wages, benefits and other compensation; hours of work and scheduling; assignment of duties to be performed; supervision of the performance of duties; work rules and directions governing the manner, means and methods of the performance of duties and the grounds for discipline; tenure of employment, including hiring and discharge; and working conditions related to the safety and health of employees.  

As you can see, under these very broad categories, for highly regulated long-term care facilities that are explicitly required to maintain minimum staffing levels and ensure all onsite workers comply with health, safety and other care requirements, joint-employer status might be found with practically any third-party worker who provides onsite services. 

Under the prior joint-employer standard, while a finding of joint-employer status between a facility and its agency or vendor workers was possible, the board looked for evidence of significant, direct control over the terms and conditions of the worker’s employment. 

This was still a real risk for long-term care facilities, particularly for onsite, agency-employed caregivers, where a facility inevitably must exercise authority to supervise or direct such workers. Under the new rule, a finding of joint-employer status may be as simple as proving that a facility has health and safety rules that apply to all onsite workers. 

Facilities of all sizes which are already the target of union organizing efforts may find themselves subject to brand new collective bargaining obligations and may have greater exposure for unfair labor practice violations. 

Now is the time for facilities to consider their third-party worker relationships and contracts with staffing agencies and other entities to look at potential joint-employer liability issues. Review your contracts and agreements with all entities that supply workers who work in your facilities.  Carefully consider whether services are necessary for current business operations, whether the services can be consolidated with fewer providers, whether work needs to be performed onsite or at the facility’s specific control or direction, etc. 

If control over the workers is unnecessary, consider eliminating open-ended contract language that reserves all rights to direct and control the workers to the facility. If the workers are necessary, make sure facility staff know whether direct or indirect control and direction of the workers’ tasks is required under the specific circumstances and train managers and supervisors accordingly. 

The risk of a joint-employer finding will be necessary under many circumstances involving onsite agency caregivers, but for other workers, it may not be and facilities should be considering the issue for all work performed onsite. Taking the time to do so now may help avoid major potential risk of a finding of joint employer status down the line.  

Neville M. Bilimoria is a partner in the Chicago office of the Health Law Practice Group and member of the Post-Acute Care And Senior Services Subgroup at Duane Morris LLP, as well as the Cannabis Law Practice at Duane Morris LLP; nmbilimoria@duanemorris.com.

Jennifer Long is a Special Counsel in the Chicago Office of the Employment, Labor, Benefits and Immigration Practice Group at Duane Morris LLP, JLong@duanemorris.com.  Neville M. Bilimoria is a partner in the Chicago Office of the Health Law Practice Group and member of the Post-Acute Care And Senior Services Subgroup at Duane Morris LLP.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

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Multiple factors make it likely that the trend of rising labor activity in long-term care will continue in 2024, experts say.

In 2023, care workers and others across the US — from writers and actors, to auto workers — launched high-profile strikes, often successfully bargaining for higher pay and improved working conditions. 

These strikes capitalized on shifting workforce conditions and public opinion, Adam Dean, PhD, associate professor of political science at The George Washington University, told McKnight’s Long-Term Care News. 

Only 16% of nursing homes currently have workers that are represented by a union, but that number is likely to increase if today’s trends hold, he added.

“There’s enormous potential for the growth of unions in that sector and I think that the big labor wins that people have been following in the news … set the stage nationally for what’s possible when workers unionize,” he said. “I think that will set the stage for 2024. I expect to see more organizing and more strikes to come.”

Striking a good balance?

Dean was optimistic that such labor activity would benefit both workers and the long-term care industry as a whole.

“I expect that it will improve the quality of healthcare that residents or patients receive,” Dean noted, citing a study he coauthored that found unionized nursing homes were 78% more likely to comply with illness and injury reporting regulations. 

In skilled nursing, pressure from organized labor has been mounting since the early days of 2020, when workers threatened to strike over pandemic working conditions and the availability of safety equipment.

October 2023 saw the largest strike ever recorded in the healthcare sector as 75,000 Kaiser Permanente workers walked off the job for three days. That strike culminated in a 6% pay increase and promises of additional action to address staffing shortages.

Going into 2024, pay and staffing continue to top the list of labor issues that could become the spark for organized action

“The SEIU and other labor unions that represent healthcare workers have been pushing for higher nurse-to-patient ratios,” Dean noted.. “I expect those kinds of fights to continue.”

One key factor in the current labor upswing is the low rate of unemployment. 

Broad forces in play

“We have a low unemployment rate currently in the United States, which gives workers greater bargaining power with their employers,” Dean noted.

That rate sits at only 3.7%, giving workers the confidence to make demands of their employers since they are likely to be able to change jobs quickly if necessary. 

“It gets [workers] into a position of relative security,” Jason Resnikoff, PhD, assistant professor of contemporary history at the University of Groningen told NBC Washington. “It makes it much easier for them to go on strike.”

During 2023’s increase in strikes, public opinion shifted in favor of unions, especially among young Americans, some feel. 

“There’s a growing public support for unions and strikes,” Dean said, citing a study from the American Federation of Labor and Congress of Industrial Organizations. “88% of Americans 30 and younger have a favorable view of labor unions.”

The AFL-CIO study found that 71% of Americans supported unions overall. 

This might be the best day of the year to consider labor relations in long-term care.

For many workers, May Day is cause for celebration. But given its precarious roots (inspired by violence) and current patrons (unions), it should hardly be surprising that the sentiment is far from universal.

I’m not here to argue either side’s talking points. But I do think that this is probably as good a time as any to size up where things stand. And to perhaps offer a staffing proposal that might fuel improvement.

As for the current state of labor relations in our field, the reality is pretty obvious: It stinks. Many operators live in mortal fear their workers will organize. And more than a few unions are doing their level best to make such fears reasonable.

But union concerns are only a small part of the dysfunctional dynamic.

Let’s face it, frontline work in long-term care is hard. It’s hard physically. It’s hard mentally. And quite often, it’s hard psychologically.

Plus, if we’re going to be honest, such work doesn’t pay particularly well. How do we know? Well, if your workers are leaving because the prospect of flipping burgers or stacking shelves is more appealing, your wages are, well, poor.

Yet, it’s not hard to see why paychecks are consistently meager in long-term care. For despite relatively low pay, labor costs remain the largest single expense at most facilities. Small surprise then, that unfilled positions are the norm.

So how do we fix chronic understaffing, or at least make it a bit less problematic?

For what it’s worth, here’s my suggestion.

First, create a new visa category for nurses and nurses’ aides. Qualified foreigners would be eligible. Their perk? Entry to the US for five years, and a fast-track to citizenship. The catch: They must remain employed.

Second, give participating nursing homes a nice tax break.

It’s hardly a mystery why facilities would benefit. Full staffing and lower taxes? Not a bad deal.

Nor is it hard to see how the arriving employees would gain. Better paying jobs and a chance to snap off a piece of the American Dream?  Many foreigners have taken bigger risks for much less.

But let’s get real. This staffing proposal and approach have just about zero chance of actually happening.

Too many people would oppose this kind of change, right? As if current conditions are something that should be  preserved and protected.

John O’Connor is editorial director for McKnight’s.

Opinions expressed in McKnight’s Long-Term Care News columns are not necessarily those of McKnight’s.

“Rising inflation over the past year, compounded with the long-term impact of the pandemic, rising labor costs, supply chain delays, and rising interest rates, is certainly putting downward pressure on skilled nursing operators,” said Scott Thurman, who oversees Greystone’s FHA Production.

The nation’s 40-year-high inflation, which exceeded 8.25% in September, replaced staffing as a top concern of skilled nursing and senior housing facilities, according to a new CNBC survey, as small increases in essential operating expenses are making a big impact — and aren’t easy to cut.

“I don’t think the rate of inflation has slowed down much in the last six months,” David Grabowski, PhD, professor of health care policy at Harvard Medical School, told McKnight’s Long-Term Care News. “I am also concerned about other rising costs, from inputs like PPE to more general costs like food, energy services and gasoline.”

Some states countered the inflationary blow with token reimbursement increases, but many experts question whether continued pressures will be met with similar relief in 2023, said Jeff Binder, managing director at Senior Living Investment Brokerage.

Then, there are providers that took bridge loans at 0.25% to weather earlier storms, only to face the possibility of being shut out of new borrowing opportunities, added Bill Kauffman, senior principal, National Investment Center for Seniors Housing & Care.

The most obvious concern remains an unstable workforce. Skilled facilities have hiked wages more than any other industry yet face the worst recovery numbers.

In the end, such wage pressures threaten to permanently change the industry, said NIC Chief Economist Beth Burnham Mace.

“Once inflation gets embedded in the heads of businesses and consumers, it’s very difficult to get rid of that expectation,” she said. ■

Nursing homes still lag other healthcare settings in attaining pre-pandemic employment levels, at 14.2% below previous rates. That compares to a continued 12.6% reduction in Life Plan community staffing, according to a Fitch Ratings labor dashboard released Tuesday.

Still, those numbers are low enough to force Life Plan providers to shift their strategy in response to lower census and staffing, Richard Park, Fitch’s director of US public finance, told McKnight’s Long-Term Care News Tuesday.

Many Life Plan Communities are investing in assisted living and memory care services over skilled, and many have found they can provide services similar to skilled nursing in the less-regulated AL setting, for example.

“This seems to be aligning with a senior consumer preference to age in place by staying in independent living and in AL, over transitioning to skilled nursing,” Park said. “The current labor challenges could encourage LPCs to move faster on these AL and memory care projects to meet this need in the market.”

Park said that switch in care delivery focus is one of three solutions for the twin forces of a shallow labor pool and rising operation costs.

“The sector will need to grow the workforce pipeline, improve recruitment and retention, and become more creative and efficient in care delivery,” he said.

Park said many of the providers the firm rates were already in the process of reconfiguring post-acute care services, including reducing beds, before the current labor challenges. But persistent staffing issues are now another headwind.

The report noted the ongoing labor shortage has boosted wages from 18% to 21% for LPCs, assisted living facilities and nursing facilities from just before the pandemic through August 2022. In comparison, wage increases for the overall private and healthcare sectors ranged from 13% to 15% during the same period.

“Pressure on lengths of stay and reimbursement, the growing use of home healthcare over skilled nursing services for hospital discharges, along with a consumer preference to age in place, have already had many LPCs rethinking their skilled nursing service lines,” Park said.

The workers, employed by Comprehensive Healthcare, Priority Healthcare, and Shenandoah Heights Healthcare, had been on strike since Labor Day Weekend. The workers wanted providers to ensure use of $600 million in public funds from the state budget would go to staffing and resident care.

The three providers gave McKnight’s Long-Term Care News a brief statement Monday, expressing their pleasure. 

“We are thrilled to have reached a fair and amicable agreement with the union to ensure our teams and our residents continue to receive the exceptional care and support they deserve.”

On August 30, Guardian Healthcare-owned facilities reached agreement with its union workers before they struck. On Monday, Guardian told McKnight’s:

“We are pleased that our collaborative efforts with SEIU resulted in a fair agreement that shows Guardian’s commitment to our team members. Even though we had contingency plans in place in the event of a work stoppage, we believe this agreement is what is best for our communities, and we look forward to continuing our efforts to enhance the wages and working conditions of all Guardian employees.

Our goal is to make Guardian an employer of choice for everyone who works here, from those who deliver frontline care to those behind the scenes. All of Guardian’s team members make our success possible.”

According to the union press release, contracts for all the homes over three ownership groups were separate but all included:

• pay raises averaging 24% that consider worker longevity and experience and the departments;
• adjustments to health insurance to make costs more affordable for all caregivers and ensure more in-network providers;
• a commitment to adhere to the upcoming improved state staffing regulations;
• successorship language to maintain union contracts if these nursing homes are sold, rather than contracts being dismantled in a sale. This protection ensures union members have the right to maintain their contracts with the new employers for a period of time, until a new agreement is reached.

The contract for Shenandoah Heights employees also included employer-paid holidays.

Those are among the findings of the 2022 McKnight’s Mood of the Market survey, which asked nearly 750 administrators, directors or nursing and other nurse leaders about job satisfaction and operating conditions. 

Responses were collected through email solicitations over a two-week period spanning late July and early August.

They show building leaders are scrambling to cope with inflation and costs that have driven up the price of everything from personal protective equipment to pharmacy services.

Asked what five expenses had been hardest by inflation over the last year, respondents’s most common answers were nursing (90%), other staffing or labor (84%), food and dining services (75%), PPE (65%) and infection control products (56%).

With fewer job candidates, high demand and persistent pandemic conditions, it’s no surprise that building leaders put nurse staffing costs first. Nursing home nurses averaged double-digit pay increases this year, with hourly rates for certified nurse aides soaring by 11.2% to $16.87. Registered nurses reported a jump of 11.1%, according to the 45th annual HCS Nursing Home Salary & Benefits Report issued in late July.

But rising construction costs were also a strong contender, with about 36% of all respondents citing it among the costs most affected by inflation. The number rose to over 40% among the administrators-only crowd.

“The increasing construction costs are driven by many of the same factors that are driving cost escalation on other fronts such as the cost of food, supplies. The staffing and related wage pressures are weaved into all of this as well,” Lisa McCracken, research director for investment firm Ziegler, told McKnight’s Long-Term Care News. “Staff shortages remain an issue across the board and employers are having to increase wages exponentially.”

Meanwhile, labor and materials costs affecting the construction trade have caused costs to  escalate unpredictably, which makes getting back into capital improvement mode extra challenging.

“We know of projects that were priced six months ago with certain financial models and now the project costs are 50 to 80% higher,” McCracken added. “It has been difficult to estimate costs with the needle constantly moving.” 

It makes sense then that delaying or canceling construction was also the top way respondents said their facilities had chosen with overall rising costs.

Just under 50% of Mood of the Market respondents overall said they’d put off a building or capital improvement project, while that portion climbed to more than 53% among administrators. Nurses leaders chose restricted admissions as a cost-saving measure (second most often at 40%), about 1.5 points higher than administrators. Twenty-nine percent in each job category said they’d discontinued services such as recreation activities, trips or entertainment.

Limiting investment in physical plant while also limiting admissions sets a dangerous precedent for skilled nursing operators, whether or not it’s due to costs of staffing shortages, McCracken said.

“There may have been providers who were going to embark upon reinvestment projects going into the pandemic, put those on hold and are now putting them on hold again because of cost escalation,” she said. “In those instances, you are now years behind a reinvestment that is needed to remain competitive and aligned with what the customer wants. You can get into a downward cycle pretty quickly here.”

6% more express census return

McCracken said that overdue projects are also affected by lower census, which leads to reduced revenue.

Overall, almost 27% of the Mood of the Market respondents said that their census had already returned to pre-pandemic levels.  Last year at this time, only 21% of survey-takers were there.

But for the rest, when more beds will be filled is scattershot. Fifteen percent predicted either the third or fourth quarter of this year, while about 19% chose the first half of 2023. Another 27% predicted full recovery in the second half of 2023, in 2024 or 2025. And just over 12% said they “never” expected a return to pre-pandemic levels, up from 9% last year.

Providers have warned for months that they are leaving beds unfilled because they can’t find staff. But some have also intentionally shut wings or buildings rather than pay inflated staffing costs.

Understaffing resulting in lower occupancy, however, was estimated to cost providers $19.4 billion in unrealized revenue, according to a June study conducted by international consulting firm Oliver Wyman and commissioned by staffing firm IntelyCare.

“Reduced occupancy leads to financial challenges, which further pressures the ability to reinvest, and that is where the downward cycle comes into play,” McCracken noted. “We understand that these can be difficult decisions on the cost front, but we would encourage providers to explore all possible scenarios before pulling the plug on a project. Downsizing or a multi-phased approach might be the more balanced alternative given all of the considerations at hand.”

More cost factors

Rounding out the top five ways in which providers cope with rising costs were eliminating agency staffing (24%) and , at a somewhat surprising level, holding off some kind of staff benefit or pay at 22%.

In earlier Mood of the Market coverage this week, McKnight’s reported that a majority of nurse leaders and administrators put higher salary among the top two changes that would improve their job satisfaction.  Better health insurance or benefits, however, interested only about 21% of building leaders.

That makes sense to Matt Stokes, a compensation analyst with Total Compensation Solutions, who says many nurses, including RNs, are more concerned with take-home pay. They, too, feel the pinch of inflation.

When it comes to saving money, it might not be a mistake to tweak benefits for certain employee groups.

“That really is affected by the age of the employees you’re talking about,” Stokes said. “Young people never think they’re going to get sick, and most think they’re never going to retire. So for that age group of individuals, they’re all about show-me-the-money … With the prices of everything just getting so out of control, pumping that money into their benefits or retirement, it’s almost a waste because they don’t think they’re ever going to use it.”

One bright spot in the survey: Therapy costs did not appear to be overly influenced by inflation among those surveyed. Just under 18% of respondents cited it in their Top 5 for inflation effects. That was compared to 84% who chose “other staff” as among the most inflated costs.

But it may be the case that many building leaders who completed this year’s Mood of the Market survey are insulated from true therapy cost increases.

“Therapy costs have gone up to the therapy provider over the last year due to inflation, like most every other item in the economy,” Manning McGraw, CEO of Broad River Rehab, told McKnight’s Wednesday. “We, the therapy companies, have contractual arrangements with the facilities that we provide therapy to that are independent of our labor costs, so they do not feel this increase in labor cost. … My guess is that the majority of the 17.88% that are saying this cost is up are in-house providers as they now own the payroll.”

This is the final article in a three-part series. See what factors administrators and nurse leaders say are leading them to ‘breaking points’ in the first, and read the second to learn what they think owners and operators should do to improve job satisfaction.

If it’s any consolation, you no longer walk alone. At least, not on the labor front.

The challenge of finding and keeping qualified workers is rapidly expanding beyond the boundaries of long-term care. In fact, staffing nightmares now seem to be the norm in almost every low-paying industry. And frankly, a few where the pay really isn’t so meager.

How bad is the nationwide staffing crisis? This bad: The Bureau of Labor Statistics started tracking job quits in 2000. The worst month ever recorded was also the most recent, August. That’s when 4.3 million Americans up and left. August also marked the sixth consecutive month of astronomical quit rates.

And while there are roughly 10.7 million job vacancies nationwide, many and perhaps most of the 7.7 million available unemployed Americans do not seem to be in much of a hurry to fill in the blanks.

Various reasons for this odd juxtaposition are being cited. Many would-be workers are both burned out and emboldened by the current seller’s market, some observers insist.

Somewhat related is that it is suddenly employers who are on their heels. As a practical matter, that means employees are in a better position to demand higher pay, perks, training, advancement and other enticements.

Others say the quitting trend does not have a single key driver. Rather, it is the inevitable residue of decades of relatively declining wages, higher prices and the hassles of trying to manage daycare needs, transportation and miserable workplace conditions — especially for those in the shallow end of the labor pool.

If any of these explanations sound awfully familiar, they should. They are pretty much the same themes long-term care operators have been hearing for years, if not decades.

But unlike many of the new targets of what amounts to a general strike, long-term care operators have at least figured out how to stay in business. Well, at least most of them have.

That’s not to say the workarounds have been pretty. Temporary staffing, hiring of the unqualified and virtually untrainable remain rampant challenges throughout the eldercare spectrum. (I know, not at your facility of course. But trust me, such things do exist.)

So what’s going to happen? My guess is that one or two things will likely play out at the new sectors suddenly feeling your labor pains.

The first is that current market conditions will eventually change. Given the cyclical nature of our economy, that is all but certain. As to how soon the next reversal might occur, I have no idea. Nor, for that matter, does anyone else.

The second is that the current malaise among workers will continue, more or less. As a result, the quality of work being performed across the service sector will likely deteriorate (as only the most desperate will take jobs). Operating costs will also rise, if only to offset higher labor costs. We can also expect to hear millions of dissatisfied customers complaining bitterly about the high price of lousy service.

That too, may sound awfully familiar. So yes, there will likely be misery ahead. But at least you’ll have some company.

John O’Connor is Editorial Director for McKnight’s.

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Elon Musk is apparently not satisfied with disrupting the transportation, space exploration and telecommunications sectors. Now he is setting his sights on long-term care. At least indirectly.

Musk announced Thursday that Tesla will begin making humanoid robots. Their general purpose, he said, will be to “eliminate dangerous, repetitive and boring tasks.” In other words, to do many of the jobs now performed by your front-line employees.

While a prototype is still a year or so away, the “Tesla bot” is expected to weigh in at around 125 pounds, and stand about 5-foot-8. It will be capable of carrying roughly 45 pounds, while being able to deadlift more than three times as much.

The bot’s head will contain the same kind of autopilot cameras Tesla vehicles use to sense the surrounding environment. It will also feature a screen that displays information. Should Musk succeed here, labor as it is deployed across this sector — and beyond — may never be the same.

“It has profound applications for the economy,” Musk said, adding that “in the future, physical work will be a choice.”

So far, so good. But I do have a few concerns.

First, these are robots we’re talking about! Has anyone seen what kind of destruction they are capable of? To be honest, I haven’t either. But I did watch “I Robot,” which really put the fear of artificial intelligence in me. Are these the kinds of helpers you want in your facility?

On a more serious note, I’m not sure how safe some of Musk’s inventions actually are. Yes, he’s brilliant. And sure, Tesla makes wonderful automobiles. But it appears that his electric cars may not have all the bugs worked out.

Just last week, The National Highway Transportation Safety Administration announced it is investigating Tesla’s Autopilot system, which is used in hundreds of thousands of the firm’s cars. The inquiry was prompted by nearly a dozen incidents in which Teslas using Autopilot smashed into police cars, fire trucks and other emergency vehicles. At least one fatality and 17 injuries are tied to these accidents, according to the agency.

Maybe I’m overreacting. But if a gaggle of sensors can’t distinguish between a fire truck and the open road, I’d rather leave the driving to Greyhound.

If it’s any comfort, Musk noted that you could both outrun the Tesla bot and “overpower” it. You know, in case it goes all wackadoodle. “It’s intended to be friendly,” he said. Sure. And the Taliban intends to restore women’s rights.

To be fair, any option that helps reduce this sector’s chronic staffing shortage is worth a try. Let’s just make sure this cure doesn’t make things worse.

John O’Connor is Editorial Director for McKnight’s.