Temp staff at nursing homes, hospitals could have wages capped under Iowa bill

A bill capping wages for workers with temporary-staffing agencies in Iowa nursing homes and hospitals could help rein in costs for medical providers, lawmakers said during House debate Tuesday. But others argued the measure could further worsen workforce shortages in the field.

House lawmakers approved House File 2391 Tuesday in an 80-17 vote. The legislation would establish a maximum allowable charge of no more than 150% of the statewide average wage paid by specific types of health care facilities to nursing services workers working through a staffing agency.

Agencies also would be required to register with the state Department of Inspections, Appeals, and Licensing before being able to work with Iowa health care entities. The bill would add new civil penalties for employment agencies that do not comply with Iowa law.

If signed into law, the Iowa Department of Health and Human Services may be required to hire three new full-time employees at a cost of $200,000 to the state in fiscal year 2025, and $195,000 in FY 2026, according to a fiscal analysis by nonpartisan legislative staff.

Rep. Timi Brown-Powers, D-Waterloo, said while she understood concerns about the 150% cap and increased oversight costs, she said it was necessary to address problems currently facing Iowa health care facilities and workers.

“If we really look at what’s happening, it is a budget problem for hospitals and nursing homes,” Brown-Powers said. “It’s a morale issue for health care workers that’ve been there stuck in there, that are working for a rate and working alongside traveling nurses making three, four times what they’re making. … I hope that by passing this that some of these monies will go into increasing those wages for current staff, recruiting new staff and holding staff at these facilities.”

Speakers supporting the bill at a subcommittee meeting earlier in February said the cap would not suppress temp workers’ pay, but would create a “level playing field” for all workers in the industry.

Rep. John Forbes, D-Urbandale, said he understood that there were issues of high costs for agency workers during and following the COVID-19 pandemic, but said he was concerned about “overregulating this industry and telling them what they should be charging for their services.”

Though there was “gouging in the system,” Forbes said the 150% cap could discourage staffing agencies from doing business in Iowa. That could leave health care facilities without staff who are often providing needed medical support to Iowans.

“It’s going to make it, I think, difficult for some of these businesses to continue to stay in business in Iowa,” Forbes said. “And especially being a rural state, a lot of the nursing homes in the rural areas sometimes run into staffing shortages, and this could create some issues … especially in rural Iowa, where there is not going to be enough workforce on a very short-term basis to be able to provide these services to to our most vulnerable people.”

The bill is next up for consideration in the Senate.