BREAKING NEWS! On November 22, a federal district court judge issued an injunction which effectively blocks implementation of the new DOL Overtime Exemption final rule indefinitely. For more information, click here.
Providers of vital community services to individuals with intellectual and developmental disabilities need help from Congress to keep their services stable in the face of recent changes to federal law. These changes will greatly raise the cost of providing services without increasing the federal and state funding on which these providers rely. These new costs will create unintended hardships for the direct support workforce and the people they help lead full lives unless Congress takes action.
Understanding Who Needs Help:
Providers of community services offer intensive and critical services for individuals with intellectual and developmental disabilities. This includes helping individuals eat, bathe, take crucial medications, find or go to work, and generally be an active member of society. These services are offered within a community setting, allowing individuals to live with friends or peers in group homes, with their families, or in homes of their own with just the amount of help they want and need. Over 90 percent of funding comes from state and federal Medicaid dollars, which providers have no ability to negotiate. Unlike some other federal programs, the rates are fixed, and often do not cover the actual cost of services. As it stands, the funding is not enough to meet the community’s needs. Currently many states have waiting lists for these services – a situation that is likely to worsen as providers are facing increased costs without additional support.
The Revised Federal Law and Its Unintended Consequences:
On May 23, 2016 the Department of Labor finalized a rule that determines who qualifies for overtime protections, and who may be exempted from overtime, based on a minimum salary and job function. With the new rule, the Department of Labor more than doubled the overtime exemption salary threshold for certain categories of employees, including those who manage and run community services for individuals with intellectual and developmental disabilities. The relevant salary threshold for providers has been increased from a minimum $23,660 per year to $47,476 per year. This change will take effect on December 1, 2016 and the threshold will be automatically increased every three years.
While providers fully support the intent of the rule and raising the wages of the professionals who perform this difficult but essential work, this new threshold is very challenging for them to meet with their current Medicaid funding levels. Unplanned and variable overtime is a reality in this field for supervisors who have to make sure critical services remain stable by stepping in when direct care staff are not available. As such, funding constraints could force providers to make difficult choices which will likely lead to scaled back wages at all levels of the organization, or services, or both. This would have disastrous consequences for the individuals they serve.
An Incomplete Solution: The Department of Labor has recognized this unique difficulty and delayed federal enforcement of the overtime exemption rule for 34 months for a limited subset of these Medicaid intellectual and developmental disability providers. However, this is an incomplete solution because of its narrow scope and the exposure of providers to other enforcement actions .. To minimize legal risk given their scarce resources, providers expect to have to comply with the rule on its implementation date of December 1, 2016. This does not give providers enough time to advocate for more funding at the state level for their services. They need Congress to take action so they have the funds to comply in December, while gaining the time to make their case to the states to solve the problem in a more permanent way. Providers want to do the right thing by their staff and the individuals they serve, they just need temporary help and more time to do so.
Congress Must Put Funding in Place to Protect Workers and People with Disabilities NOW – Before Services Are Affected. Congress has an opportunity to avert a service crisis for individuals with intellectual and developmental disabilities before it occurs. If it grants more Medicaid funding to providers of community services now, they will be able to comply with the overtime exemption rule without having to reduce services or wages. Because the rule will take effect before the end of the year, time is a luxury that this community does not have. We hope Congress will treat this issue with all the speed and consideration necessary.