State Policy Network

Protect Providers

End Dues Skimming

America’s care providers are under attack by politicians and unions attempting to unfairly skim dues from funds that are supposed to help our country’s most vulnerable

The Biden administration is attempting to roll back federal rule issued in 2019, that ended states and unions from scheming to take money from home healthcare providers working to care for America’s most vulnerable. Small business owners who provide childcare out of their homes, often to children from low-income families, are also still being victimized and losing tens of millions of dollars each year.

This is happening through a scheme known as “dues skimming,” wherein a state takes money off the top of support checks intended to help those in need and sends it to unions. While this practice has always been wrong and undermines federal and state programs for America’s most in-need populations, childcare providers are needed now more than ever to provide crucial relief to families struggling from the impacts of the COVID-19 pandemic.

These essential workers, many of whom are now providing safe places for children to learn virtually, should not need to worry that a far-off organization they never interact with is taking a cut of their support check. And, Americans should have the peace of mind knowing that their tax dollars are going to help those in need, not line the pockets of multi-billion dollar organizations like unions.

Mini-Documentary: The Big Skim

Union greed knows no bounds as the SEIU colludes with the US Government to fill union coffers by robbing family care givers of Medicaid support intended to compensate them for the time and money spent providing care for the elderly and disabled. The unions’ fiendish scheme of forced unionism is exposed by a team of enterprising policy experts, attorneys, and parents, who must battle the dual leviathan of Big Government and Big Unions, to stop the theft, and dismantle corrupt Obama-era legislation. (19 minutes)

Produced by State Policy Network and Passing Lane Films, The Big Skim was awarded Best Short Documentary at the 2020 Anthem Film Festival. 

The Issue

For decades, state governments have worked with unions to divert money away from people in need to unions. Prior to 2019, dues skimming was happening to both home healthcare providers—who provide care to elderly, sick, and disabled people, often family members—and childcare providers who look after low-income children from their homes. Dues skimming was costing home healthcare providers an estimated $200 million each year. The federal government attempted to prohibit the practice, but it was tied up in court and the current administration has started the process to roll back those protections.

Eleven states currently have structures in place to permit unions to skim dues from Medicaid funds that should pay caregivers. Many of these individuals take care of disabled friends and family members. Freedom Foundation of Washington state estimates that this scheme diverted $150 million to unions from Medicaid funds in 2017, totaling over $1.4 billion since 2000.

Childcare providers, who are more essential now than perhaps ever before, are still losing out to this scheme in at least nine states. The amount being taken from them is currently unknown because unions in California have recently begun skimming money from the paychecks of approximately 40,000 childcare workers. Prior to this, the dues skim was estimated to cost childcare workers $50 million each year.

Federal leaders must take the steps to ensure those funds are protected and provide relief to the families and essential workers hit hardest by the pandemic. The Trump-era protections need to be preserved and also extended to childcare workers. Congress must also stipulate that new funding for these programs may not be diverted to third parties, like unions.

Additional Background

Union-supporting governors and state legislatures in these states declared home healthcare and daycare providers “public employees” simply because they are receiving state subsidies to take care of the needy. In states that aren’t right-to-work, this means that caregivers were forced to pay union dues. A 2014 Supreme Court ruling in Harris v. Quinn questioned the “public employee” status and declared that unions could not force these caregivers to pay the unions. However, the decision did not end the problem. Unions continue to pressure and deceive caregivers into membership so they can collect dues.

State governments and unions developed unfair and confusing rules that trap caregivers in the dues skim. For example, some caregivers can only opt-out of their union during a 15-day annual period that varies by member. In Minnesota, caregivers have alleged that unions forged signatures on membership cards. Unions have similar arrangements in other states. The structure for dues skim exists in: Washington, Oregon, California, Connecticut, Illinois, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, Vermont, and Rhode Island.

A Brief History of the Regulation:

The 2014 Obama regulation created 42 CFR § 447.10(g)(4), which states:

“In the case of a class of practitioners for which the Medicaid program is the primary source of service revenue, payment may be made to a third party on behalf of the individual practitioner for benefits such as health insurance, skills training and other benefits customary for employees.”

  1. Health and Human Services (HHS) repealed this regulation in 2019.
  2. In November 2020, Judge Chhabria (District Court for the Northern District of California) vacated HHS’ recission of the Obama rule.
  3. HHS appealed to the 9th Circuit in January.
  4. The new administration asked the court to stay the appeal.

What is dues skimming?

Why is this so wrong?

Dues skimming robs the vulnerable who need this help the most.

Every dollar of Medicaid funds that state governments divert to SEIU and other unions is one less dollar available to help those in need.

Dues skimming perverts the law.

Both Medicaid and child care-assistance programs have a narrowly defined purpose to help our country’s most vulnerable. Redirecting these funds to unions that aren’t directly helping program recipients should be prohibited to maintain program integrity.

Dues skimming just isn't right.

Many of these healthcare providers serve a family member or friend from their home. No parent should be coerced into paying a union just to care for their own disabled child.

Dues skimming isn't about care.

It is unfair that money skimmed from care providers is used by the unions to further legislative and political interests, pay executives, and even cover administrative costs—things that have nothing to do with serving these workers or the care recipients.

Solution: How Policymakers Can Help

A recent nationwide survey found that a vast majority of Americans oppose dues skimming and two-thirds find the current opt-out procedures unfair. Home healthcare and childcare providers deserve a permanent fix so they can have freedom of choice to focus on providing care instead of fighting off unions that rob a portion of their payment.

While the Trump administration defends its dues skim fix for home care providers in court, childcare providers still do not have basic protections. The US Department of Health and Human Services (HHS) has the authority to fix dues skimming and prevent states from acting as unions’ dues collection agents by:

Preserving the program through issuing clarifying guidance that dues skimming is a misuse of federal child care funds and states should cease diverting these funds to unions. HHS could go a step further and declare the use of these funds for unions dues as impermissible, unrelated to the grant’s purpose and should cease immediately.
Related Resource: Agency Guidance to Minimize or Eliminate Dues Skimming (Mackinac Center for Public Policy)

Protecting childcare providers’ rights though requiring any state that skims dues to have unions annually obtain waivers from providers who want to join so they are not trapped and their First Amendment rights are protected.
Related Resource: Opt-in Requirement to Ensure Clear Consent (Mackinac Center for Public Policy)

Congress can also ensure that programs such as the Childcare Develop Block Grant are used for the right purposes, especially for any emergency appropriations for childcare providers impacted by COVID-19. Download SPN’s full memo for more information.

Latest Updates

August 3, 2021: Biden Administration releases a Notice of Proposed Rulemaking (NPRM)

On August 3, 2021, the Biden Administration released a Notice of Proposed Rulemaking (NPRM) addressing union “dues skim.” This will roll back Trump-era reforms that closed the loophole permitting the unfair and confusing rules that trap home caregivers in unions. It also mentions voluntary consent as a nod to Janus and Harris. The new regulation would create 42 CFR § 447.10(i), to read:

“The payment prohibition in section 1902(a)(32) of the Act and paragraph (d) of this section does not apply to payments to a third party on behalf of an individual practitioner for benefits such as health insurance, skills training, and other benefits customary for employees, in the case of a class of practitioners for which the Medicaid program is the primary source of revenue, if the practitioner voluntarily consents to such payments to third parties on the practitioner’s behalf.”


May 2, 2019: DHS Ends Unfair Practice of Dues Skimming
The Department of Health and Human Services protected America’s most vulnerable people by ending a decades-long scheme that robbed homecare providers of an estimated $150 million dollars each year. Under the new rule finalized on May 2, 2019, state governments may no longer take money out of Medicaid support checks intended to improve the quality of life of America’s sick, elderly and disabled, and give it to unions. This means family members and friends who stay home to care for loved ones will keep all of the money that is owed to them moving forward, rather than seeing hundreds or over a thousand dollars each year sent to a union they may not know.

Unfortunately child care providers for low-income families are still impacted by this scheme. A recent joint report by Freedom Foundation  and Mackinac Center for Public Policy  lay out several policy solutions to address this injustice. Learn more about these efforts.


August 14, 2018: DHS Reviewing Public Comment on Proposal to End Dues Skim
The US Department of Health and Human Services (DHHS) has closed its public comment period on a proposed rule that, if enacted, will prohibit states from taking money from Medicaid checks and giving it to unions.

Comments supporting DHS’ proposed move submitted during the 30-day period explained how dues skimming jeopardizes the needed Medicaid program and falls outside its narrowly defined purpose. Other comments touched on the unfairness of dues skimming, which robs our country’s most vulnerable of approximately $150 million a year.

DHHS is currently reviewing comments. Check back for further updates on the status of this proposed rule to end dues skimming and the ongoing efforts to protect in-home caregivers from this unfair and deceptive scheme.


July 10, 2018: Department of Health and Human Services Proposes End to Dues Skim, Seeks Public Comment

State governments may soon be prohibited from allowing unions to skim millions of dollars from the Medicaid checks of people who are caring for sick friends and relatives.

Today, the US Department of Health and Human Services (HHS) announced a Notice of Proposed Rulemaking to protect the integrity of the Medicaid program by ensuring states are no longer able to take union dues from the support checks of in-home caregivers who look after our country’s most vulnerable. If the rule is enacted, people who stay at home to care for elderly, sick, and disabled loved ones will be able to keep the entirety of their Medicaid support checks; states will no longer be able to siphon money away and give it to government unions.

Each year, in-home caregivers lose an estimated $150 million from their support checks, and this proposed rule is a way to stop this unfair and deceptive scheme once and for all.

HHS said it will publish a Notice of Proposed Rulemaking (NPRM) in the Federal Register on Thursday, July 12, marking the start of a 30-day-long period during which the public may comment on what the rule would mean for them. Impacted caregivers are especially encouraged to provide comment on the personal impact of the rule to them and their families and patients.

The public comment period is now open. Comment on the proposed rule to end the Dues Skim here. All comments are due no later than 5 p.m. EST on August 13, 2018.

Additional resources:


May 2, 2018: Lawmakers voice concerns over dues skimming

US Sen. Ron Johnson (R-Wis.) sent a letter to the Centers for Medicare and Medicaid Services challenging the practice of dues skimming. He notes in his letter that it is illegal for Medicaid funds to be sent to anyone other than the caregiver, encourages CMS to look into the practice, and asks for information on whether a new law or regulation is required to stop this from happening. He joins Rep. Cathy McMorris Rodgers (R-Wash.), who also recently voiced concerns with dues skimming, signaling an end could be in sight for this deceptive scheme. Read his letter here.

Maxford Nelsen, Director of Labor Policy at the Freedom Foundation in Washington state, observed, “For over a decade, unions like SEIU have been permitted to hijack Medicaid funds meant for caregivers serving the elderly and disabled. Even though the US Supreme Court denounced this practice as a ‘scheme’ in 2014, unions and their allies in state governments continue to employ coercive practices to seize hundreds of millions of dollars in union dues from the Medicaid payments of hundreds of thousands of caregivers’ in states across the country. It is very encouraging to see Sen. Johnson and the Governmental Affairs Committee taking this issue seriously. Federal action is urgently needed to protect caregivers’ rights and to stop Medicaid funds from being siphoned off to politically influential special interest groups.”

What do Americans think about this issue and possible solutions?

7 out of 10 support anti-dues skimming policies, with nearly half strongly supporting.

There is 12 to 1 support for the proposed federal solution to dues skimming.

88 percent of Americans think the federal government should put a stop to dues skimming.

87 percent of Americans believe tax dollars should support those in need, not unions.

6 out of 10 Americans agree that it should be simpler for caregivers to opt our of union membership.

Stories from Illinois

Illinois Policy Institute

Pam Harris

Pam Harris is an Illinois mother whose son Joshua, “needs constant care because of a rare genetic syndrome that causes severe intellectual and developmental disabilities.” She was lead plaintiff in Harris v. Quinn, the Supreme Court case which gave right-to-work to home healthcare providers.

Learn More

Stories from Michigan

Mackinac Center for Public Policy

Glossop Family

"Isabella County's Steven Glossop has been providing care for his 71-year-old mother Linda Glossop for the last four years. Linda had heart surgery and suffered a stroke while recovering at the hospital, which limits her mobility. Steven noticed money was being taken out of their Medicaid payments and going to a union. He contacted the Service International Employees Union asking to be released from the union. That did not happen."

Learn More
Mackinac Center for Public Policy

Robert and Patricia Haynes

"Rob and Pat Haynes of Michigan’s Macomb Township have adult children, but will never be 'empty nesters.' Around the clock, in their home, and probably for life, they care for their children, Melissa and Kevin, who suffer from cerebral palsy. Medicaid was meant to help people like the Haynes, who face heavy healthcare burdens through no fault of their own. But the Haynes’ decision to care for their children at home and accept Medicaid payments to offset the costs caused them to be labeled 'government employees' who are subject to 'union dues' — a violation of their rights and a corruption of public assistance for them and nearly 60,000 other home health care providers."

Learn More

Stories from Minnesota

Center of the American Experiment

Catherine Hunter

Catherine Hunter is a Minnesota Personal Care Assistant and former teacher. She looks after her son, Drew, who has a birth defect that requires the assistance of another adult. A union organizer came to the Hunters’ home to encourage Catherine to join the SEIU and hand over a portion of Drew’s Medicaid support checks to the organization, even though she didn’t feel it would represent her or her son’s interests. Catherine’s drive to protect the tax dollars allocated to help people like Drew led her to get involved to decertify the union.

Learn More
Freedom Foundation of Minnesota

Jennifer Parrish

Jennifer Parrish runs a daycare out of her home and has fought against being unionized. In 2013, Parrish won State Policy Network's Unsung Hero Award for her support of workers' rights. She now runs the Coalition for Union Free Providers.

Learn More

Washington Stories

Freedom Foundation (Washington)

Brad Boardman

"I take care of my sister-in-law seven days a week. Her Medicaid reimbursements help me care for her. For 11 years, the union has been taking money from her reimbursements without permission." After learning about the Harris v. Quinn decision, Brad chose to opt out of the union so they could no longer take money out of his sister's reimbursements.

Learn More
Free State Foundation

Rosetta Horne

Rosetta Horne provides care to her mother. She was told that in order to receive state funding she would have to join the union. She was lied to, but now knows the truth.

Learn More
Freedom Foundation (Washington)

Sandra LaCelle

Like thousands of caregivers around Washington state, LaCelle was forced to pay union dues and/or fees as a condition of her contract with Medicaid, which pays gives a stipend to care for her disabled daughter. However, the U.S. Supreme Court ruled in 2014 that individual providers cannot be considered full-fledged union employees for representation purposes.

Learn More
Freedom Foundation (Washington)

Ben and Tammy Olsen

The Olsens care for their son. Reflecting on their circumstances, the Olsens said, "Having the union take our money was a real hardship on us. We used to pay $2,000 a year in dues...that could be spent on gas, groceries, and medical bills. The union has never helped us, and we're better off without them."

Learn More
Freedom Foundation (Washington)

Mary Jane Olson

Caregiver Mary Jane helps make sure her Autistic grandson receives the love and care he needs. For her, caregiving isn't a profession, but simply a service to her family.

Learn More
Freedom Foundation (Washington)

Michelle Peterson

Michelle Peterson is the caregiver for her daughter, Emily. She never wanted to be part of a union and never signed a membership card. But SEIU 775 and the State of Washington didn’t care, and they took her money anyway. She didn’t even know the state was withholding union dues for SEIU 775 from her pay until informed by the Freedom Foundation of her constitutional right to have the deductions stopped.

Learn More
Freedom Foundation (Washington)

Miranda Thorpe

Homecare provider Miranda Thorpe provides care for her daughter, Sarena, and receives reimbursement subsidies from the State. Even though the union can’t legally force providers to join the union, the state and union colluded to force every provider to pay full union membership dues until the provider completes a specific opt-out process. The union skims hundreds of thousands of dollars from providers who have never signed membership cards. Miranda, with the help of the Freedom Foundation’s legal team, brought a lawsuit to stop this deceptive practice.

Learn More

SPN Policy Advisor Vincent Vernuccio discusses dues skimming on Fox Business

SPN Resources

Dues Skim Issue Brief

This one-pager summarizes the dues skim problem and how policymakers can help.

Download this resource.


Stories One-Pager

This one-pager features a few brief testimonials of medicaid caregivers harmed by the dues skim.

Download this resource.


For more information, see the FAQs on this issue.


Education Efforts

Freedom Foundation (Washington) Opt Out Today
Center of the American Experiment MNPCA
Illinois Policy Institute Leave the SEUI
Illinois Policy Institute Care for Illinois

SPN Contact

Jennifer Butler

Senior Policy Advisor