HEALTHCARE SERVICES GROUP, INC. DECLARES FOURTH QUARTER 2009 CASH DIVIDEND Bensalem, PA

HEALTHCARE SERVICES GROUP, INC.

DECLARES FOURTH QUARTER 2009 CASH DIVIDEND

Bensalem, PA January 29, 2010- Healthcare Services Group, Inc. (NASDAQ-HCSG)

Our Board of Directors has declared a regular quarterly cash dividend of $.21 per common

share, payable on March 5, 2010 to shareholders of record at the close of business February 12,

2010. This dividend represents a 5% increase over the dividend declared for the 2009 third quarter

and a 24% increase over the 2008 same period payment. It is the 27th consecutive regular quarterly

cash dividend payment, as well as the 26th consecutive increase since our initiation of regular

quarterly cash dividend payments in 2003

We intend to release our results for the year ended December 31, 2009 during the week of

February 8, 2010, as well as to hold a conference call to discuss our results after the release. In

connection with the results to be reported on in the upcoming release, the Company has, without

admission of any violations, reached settlements in January 2010 of certain employment related

matters with the U. S. Department of Labor and certain states which it estimates that such

settlements, and related costs and expenses will unfavorably impact 2009 financial results by

approximately $.04 to $.05 per diluted common share.

The Company also announces that it will make a presentation on February 10, 2010 regarding the

Company at the UBS Warburg Global Healthcare Services Conference at the Grand Hyatt in New York

City. Additionally, this presentation will be audio webcast at www.ibb.ubs.com.

Cautionary Statement Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the

Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 (the

Exchange Act ), as amended, are not historical facts but rather based on current expectations,

estimates and projections about our business and industry, our beliefs and assumptions. Words such

as believes , anticipates , plans , expects , will , goal , and similar expressions are

intended to identify forward-looking statements. The inclusion of forward-looking statements should

not be regarded as a representation by us that any of our plans will be achieved. We undertake no

obligation to publicly update or revise any forward-looking statements, whether as a result of new

information, future events or otherwise. Such forward looking information is also subject to

various risks and uncertainties. Such risks and uncertainties include, but are not limited to,

risks arising from our providing services exclusively to the health care industry, primarily

providers of long-term care; credit and collection risks associated with this industry; one client

accounting for approximately 12% of revenues in the year ended December 31, 2009; risks associated

with our acquisition of Contract Environmental Services, Inc., including integration risks and

costs, or such business not achieving expected financial results or synergies or failure to

otherwise perform as expected; our claims experience related to workers compensation and general

liability insurance; the effects of changes in, or interpretations of laws and regulations

governing the industry, our workforce and services provided, including state and local regulations

pertaining to the taxability of our services; and the risk factors described in our Form 10-K filed

with the Securities and Exchange Commission for the year ended December 31, 2008 in Part I under

Government Regulation of Clients , Competition , Service Agreements/Collections , and under Item

IA Risk Factors . Many of our clients

revenues are highly contingent on Medicare and Medicaid reimbursement funding rates,

which Congress has affected through the enactment of a number of major laws during the past decade.

These laws have significantly altered, or threatened to alter, overall government reimbursement

funding rates and mechanisms. The overall effect of these laws and trends in the long-term care

industry have affected and could adversely affect the liquidity of our clients, resulting in their

inability to make payments to us on agreed upon payment terms. These factors, in addition to delays

in payments from clients, have

resulted in, and could continue to result in, significant additional bad debts in the near

future. Additionally, our operating results would be adversely affected if unexpected increases in

the costs of labor and labor related costs, materials, supplies and equipment used in performing

services could not be passed on to our clients.

In addition, we believe that to improve our financial performance we must continue to obtain

service agreements with new clients, provide new services to existing clients, achieve modest price

increases on current service agreements with existing clients and maintain internal cost reduction

strategies at our various operational levels. Furthermore, we believe that our ability to sustain

the internal development of managerial personnel is an important factor impacting future operating

results and successfully executing projected growth strategies.

Healthcare Services Group, Inc. is the largest national provider of professional housekeeping,

laundry and food services to long-term care and related facilities.