From the early 1970’s to now
The DRA business model was established in the early 1970s. CCDRAs roots date back to the 1980s when a few DRA owners started a networking group. CCDRA members were instrumental in getting legislation passed that had a monumental impact on saving our industry by ensuring the legal right of all DRAs to register and refer independent domestic workers. Today, CCDRA is the only non-profit mutual benefit member organization of Domestic Referral Agencies (DRAs) in California. CCDRA was established to provide awareness and education of the regulations under which our business model operates, as well as to form a united group in the protection of that model.
DRAs were required to obtain a license with the Department of Personnel Service. This process involved both an extensive questionnaire and testing.
DRA owners in the Sacramento area started a networking group to meet and discuss their common business interest.
The IRS created an “Employment Tax Examination Program”, which called for audits of small businesses to determine if they had misclassified workers as independent contractors. The EDD, working hand in hand with the IRS, were also conducting business tax audits.
The EDD automatically reclassified the domestic workers as employees of a few DRAs, without the benefit of a full audit, and presented the Agencies with large bills for back employee payroll taxes, fines and penalties. Upon learning of the audits, the networking group decided to seek assistance from the State Department of Personnel Services, a member of the State Assembly and the Director of EDD. All efforts to work with any of these entities were unsuccessful.
Legislation was enacted, which repealed the statute requiring DRAs to obtain a license with the closing of the Department of Personnel Service. This left DRAs further exposed to employment classification audits from government agencies.
April’s Housekeeping received a tax assessment bill from the EDD as a result of their ruling to reclassify the domestic workers as employees. This precedent-setting tax decision paved the way for the possible demise of the DRA Business Model.
Due to increasing pressures from governmental audits the Sacramento networking group expanded its grass roots efforts to include DRAs from all areas of California.
The networking group formed a coalition of DRAs upon learning about legislation sponsored by the EDD to eliminate all independent contract workers for all service industries. Through the cohesive efforts of the DRA coalition group and others this legislation was defeated.
The DRA coalition sponsored Assembly Bill 1370. At the time this bill was introduced the EDD had 67 assessments of domestic employment agencies pending, which represented $2.5 million. The legislation included an amnesty clause to abate these assessments. Had AB 1370 not passed into law we more than likely would not be here today. Its impact was monumental in saving our industry by ensuring the right of all DRAs to register and refer independent domestic workers. It established statutes, which characterize & regulate the relationship between the agencies, the independent domestic worker, and the client. The passage of this legislation into law effective January 1994 added Civil Code Section 1812.5095 and Unemployment Insurance Code Section 687.2.
AB 1370 became effective, adding CC 1812.5095 and UIC 687.2. Members of the DRA coalition began presenting its first workshops to other agencies throughout California to acquaint them with the new laws regulating the industry. Additional legislation was introduced in 1994 and passed into law effective January 1, 1995, which amended Section 1812.5095 of the Civil Code, to clarify and protect the consumer by adding a requirement to verify legal status of domestic workers and the client oral, written and advertising disclosures.
Legislation was introduced and passed into law effective January 1, 1996, which amended Section 1812.504 of the Civil Code allowing DRAs to have a contract with domestic workers on a continual basis, rather than the prior requirement to renew the contract every 180 days.
The only legislative action of concern for DRAs was the passage of legislation, which required all businesses that utilize IC’s, including DRAs, to report domestic workers income over $600.00 on form DE 542.
10 years after the passage of AB 1370, legislation was introduced, that if passed into law would have destroyed the DRA business model. The Network of Domestic Referral Agencies (NODRA) was established during this time to represent In-home care DRAs. It took the collective efforts of 2 lobbyists, both coalitions and many others to defeat this extremely harmful legislation.
CCDRA started monitoring all Assembly and Senate bills introduced along with all bill text changes so we would not be caught off guard again. As a result we were immediately aware of another extremely harmful bill introduced in February 2005, which was a direct hit to the Civil Code we operate under. Both coalition groups and a lobbyist were involved in negotiations against each harmful item in the proposed bill. In the end, all harmful aspects of the bill were dropped and what remained were unwarranted additional enhancements to the written and oral client disclosures. Governor Schwarzenegger vetoed AB 551, with the message; “this bill would give another segment the competitive advantage by adding unnecessary and inappropriately redundant requirements for DRAs”.
A second bill was introduced, which required the attention of the DRAs. The intent of this legislation was to set up a pilot project for IHSS, In-home Supportive Services. If passed, it would have expanded the current IHSS program into the private sector, creating an unfair advantage, as IHSS would not have to adhere to the same regulations as DRAs. Through the combined efforts of both coalitions, the lobbyist and others, this bill was placed in the Senate Appropriations suspense file due to the fiscal impact to the State. Unfortunately, a “Gut and Amend” bill, with almost identical language surfaced at the last minute, it passed thru the legislature, but was thankfully vetoed Governor Schwarzenegger.
Three bills were introduced calling for a “Home Care Services Act.” The stated intent of this legislation was to protect the health and safety of the elderly and disabled clientele by creating licensing to regulate workers providing in-home care services. The bills excluded licensing of DRA’s, giving an unfair advantage to the employee based businesses. Lobbying efforts were required to protect the DRA’s business model. Two of these bills were placed on the Assembly Appropriations suspense file and the remaining bill was vetoed by the Governor.
Legislative session a Domestic Work Employees bill (AB 889) was introduced to regulate items such as hours, vacation benefits, scheduled break times and sick days of domestic workers in the private sector. Lobbyist efforts were required to have DRA’s excluded from this legislation. In 2011 the bill was held under submission in Senate Appropriations. In 2012 AB 889 resurfaced, passed thru the legislature, then was vetoed by Governor Brown calling for a study by the Dept. of Industrial Relations.
(AB 241) the Domestic Workers Bill of Rights was introduced and enacted, and went into effect on January 1, 2014. Lobbyist Kathy Rees, on behalf of CCDRA & NODRA once again went to the bill author to have DRA’s excluded from the legislation. This bill requires overtime pay at one and one-half times the regular pay for domestic work employees that work more than 9 hours in any workday or more than 45 hours in any workweek. there were two Home Care Services Acts introduced, (AB 322 & AB 1217). The bill author of AB 322 was unwilling to work with, or even acknowledge DRA’s. Lobbyist Kathy Rees and CCDRA & NODRA member’s grassroots efforts were needed to assist in getting AB 322 placed onto the Assembly Appropriations suspense fill. AB 1217 was chaptered and went into effect January 1, 2016. It establishes the licensing of in-home care organizations and registration of home care aides with the Dept. of Social Services, along with other requirements, such as, professional liability insurance, training of care aides, background clearances, home care aides submitting an application to DOJ and requires home care aides to be free of active TB. DRA’s are excluded from this licensing requirement.
NODRA sponsored, with CCDRA’s support, the Home Care Services Consumer Protections Act: AB 1863 & AB 782 which called for licensure of in-home care DRA’s to expand and tailor the consumer protection standards of AB 1217. Even thought there were tremendous efforts made by lobbyist, Kathy Rees, the board members, along with grassroots support by members, neither of the bills passed thru the legislature. AB 1863 was held in the final Senate appropriations committee and AB 782 was held under submission in the Assembly Appropriations committee.
AB 1667, the Home Care Services Consumer Protection Act, was introduced by Assembly member Dodd and sponsored by Napa County. It contains the same bill language as AB 782 which was sponsored by NODRA and authored by Assembly members Dababneh in 2015. This bill would have required the licensure of in-home care DRA’s with the Dept. of Social Services, along with many of the same requirements now in effect for the home care organizations. AB 1667 was held under submission in the Assembly Appropriations Committee.