The settlement comes after lawsuits were filed to prevent cost-saving measures over the past several years.
Today's deal allows for some cuts, but eliminates the possibility of a 20 percent reduction in service hours. Advocates say all cuts could be restored in a couple of years with federal approval.
The California Department of Health Care Services says the agreement is a "significant compromise for all sides." Labor organizations say program recipients are "breathing a sigh of relief."
Caregivers with the In Home Supportive Services program provide house cleaning, meal preparation and personal care to almost 450,000 seniors and disabled Californians.