COLUMN: Non profits hurt by new overtime rules for managers

COLUMN: Non profits hurt by new overtime rules for managers

Arc of Meriden-Wallingford provides round the clock services for hundreds of individuals with developmental disabilities each day. The managers who oversee these services need to communicate and supervise employees and the individuals receiving support intermittently throughout nights and weekends to assure needs are met and everyone is safe and healthy. Call outs, hospitalizations, emergencies, etc., all determine a manager’s involvement outside of normal business hours. Due to the 24-hour operational needs of these residential programs, the managers are salaried employees, which are allowed due to the Labor Department’s salary threshold of $23,660.

The funding that covers these services comes from Medicaid dollars. It is important to note that there have not been any cost of living increases in Medicaid funding for years. Services have had to be redesigned and sometimes decreased due to a rise in expenses without the increase in funding to match. Nonprofits are continually reassessing and attempting to squeeze as much service for the dollar as possible, many times relying on fundraising dollars to make ends meet.

Recently it came to our attention that the Fair Labor Standards are being revised to increase this threshold from $23,660 to $50.440. In order to comply with this new mandate, known as the Overtime Exemption Rule, it will cost our nonprofit over $392,434.47 per year as all managers are moved to this new mandated salary level. We will have to decide which wages we can afford and then which services we can provide. This may leave many individuals with developmental disabilities with limited services or no services at all. Unfortunately, it may put many nonprofits out of business.

As a nonprofit that is 98 percent reliant on Medicaid dollars, the Arc is unable to increase our cost to customers in order to cover this increase. Any increase would have to come through an increase in Medicaid rates which providers have no control over. Should this mandate go into effect as presented without any increases, services would have to decrease — there would be no other way to cover the costs.

While we are in total agreement that employees need and deserve to receive higher wages, the system is presently not able to accommodate such an initiative. This will cause a tremendous and possibly fatal burden to providers throughout the state. It will negatively impact the individuals served and their families.

The Arc is well aware of the balance that must occur in providing services. The present system is unsustainable. In order to address the need to provide services in the most cost efficient manner, the Arc of Meriden-Wallingford, Inc. has designed several support systems for people with developmental disabilities using technology. These supports also require managers to be on call throughout the nights and weekends in order to meet their health and safety needs. Ray, for example, was living in a 24 hour living arrangement costing the state over $100,000 per year. With technology he was able to move to his own apartment. Sensors, automatic med dispensers and life lines are used for the majority of his supports. It is now costing only $40,000 per year. This is a saving to the state and the taxpayers of over $60,000 and it allows Ray to live in his own home with the privacy and independence he desires. This is a win-win situation. Ray will be negatively affected if this rule goes into effect the way it is currently written. He may have to move back into a more supervised arrangement or he would have no staff to answer his needs after hours.

People who live in the community are more likely to have a more fulfilled valued life and tend to be less dependent on the government and state to meet their basic needs. They also tend to be happier and are able to give back to their community the way that every other citizen does.

There has to be a more thoughtful long term solution to address this issue. I urge our representatives in Congress to take action to ensure that this rule is modified to a level that nonprofit agencies can work with. If this rule is to be implemented as written, Medicaid rates would have to be increased in order to protect the health and safety of the nation’s most vulnerable citizens.

So while we are all in agreement that people who work in the field of human services need to have a livable wage, the solution needs to address the total fallout, which includes the negative impact on the people receiving services.

Pamela Fields is executive director of the Arc of Meriden-Wallingford, Inc.


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