Marks Opening Remarks June 2016
Dear Friends of ACT:
Unfortunately, high employment turnover and low pay are hallmarks of our business.
Most of our funding as a service provider comes from Medicaid. Therefore, we have no ability to negotiate the rates at which we recover costs for the services we provide. They’re dictated.
The result: there isn’t enough money to provide our dedicated staff the pay the market bears were they working in another sector.
I’ve never seen this predicament more vividly portrayed than in this video co-produced by Oregon Rehabilitation Association and ANCOR: https://www.youtube.com/watch?v=tc60M4vJ5dE . Please take a look.
While it is inspiring to see Direct Support Professionals (DSPs) sacrifice so much for the care of others, at the same time it’s horrifying to see the trauma often caused when a DSP must quit her or his job to be able to earn enough money to support a family.
Last week, President Obama announced the publication of the long-anticipated overtime rule that defines exemptions for executive, administrative, professional, and other employees under the Fair Labor Standards Act.
This rule will have a major impact on ACT and our employees.
On one hand, it will likely result in some of our mid-level employees receiving fair pay for the level of work they do. On the other hand, if implemented poorly, it could challenge us and others in this field financially.
The rule will raise the salary threshold for exempt employees from $455 per week to $913 per week. For a fulltime employee, that’s $47,476 annually. The threshold doubles.
This would impact many supervisory employees at ACT and at other providers who are currently classified exempt, earn more than $23,660 per year and less than $47,476, and meet a duties test.
This rule will require us to raise the salaries of employees in that category to $47,476 per year, or keep their wages the same and make them hourly employees. We are required to pay hourly employees time and a half for work in excess of 40 hours per week. Our other option is to limit hourly employees to 40 hours per week.
ANCOR, the group I mentioned above, is doing something about this. Happily, they’ve succeeded, at least in providing us a reprieve while the details of the plan come in to focus.
The message is clear, as service providers, we want to comply with the new regulations, but we need real help in the form of Medicaid enhancements, increases that will allow us to adequately compensate these critical staff.
ACT is a member of ANCOR. We’re glad the SOS campaign to Save Our Services is working.
The Department of Labor has heard the message and agreed to implement a limited non-enforcement policy for providers of Medicaid-funded services for individuals with intellectual or other developmental disabilities (I/DD) in residential homes and facilities with 15 or fewer beds. The non-enforcement period will last from December 1, 2016 (the effective date of the rule), to March 17, 2019.
We understand that non-enforcement is not compliance. Compliance is our goal. So we’ll be making changes during the second half of this calendar year to get as close to compliance as we can afford.
But this is not enough. It gives us some time. But it does not give us the funding we need through Medicaid to finish the job.
Unfortunately, many who have listened to our call for a way to gradually implement the rule hear it as a call to kill the new regulation.
No. We cannot throw the baby out with the bath water. I’ll mix another metaphor and say this is surely the time to thread the needle. We need to get this just right.
We cannot solve this problem on the backs of the people who receive our services nor those who provide them. The video shows this clearly. If you haven’t done it, please go back up and click on the link.
Let’s adjust Medicaid rates so services continue and organizations like ACT can operate while adequately compensating the dedicated staff who give so much for the wellbeing of others.
Join me in adding your voice today.
Until next month,