Click below to listen to the audio podcast: Labor Overtime Rule and the New Administration.
The Fair Labor Standards Act (FLSA or Act) guarantees a minimum wage for 40 hours in a workweek and one and one-half times the employee’s regular rate of pay for any hours worked over that 40. But there are exceptions. In the past you had to make less than $23,660 to get that mandatory overtime pay. The Department of Labor published a rule on May 23, 2016 that increases that amount to $47,476.
For people with disabilities who rely on personal assistance services, most of which are funded by Medicaid, this had immense consequences. The key component is money. Many people who provide those services would now fall within the purview of the rule and so would have to be paid time-and-a-half for their hours over 40. The American Network of Community Options and Resources (ANCOR), an association of over 1000 agencies that often provide this kind of in-home service gave an estimate that this would add over $1 billion in costs for agencies serving those with disabilities in the first year alone. State Medicaid rates do not take into account overtime.
In addition, in recent years, time and again, efforts have been made limit Medicaid. Block grants, per capita caps etc. Efforts to push the cost onto States and unfortunately States aren’t or cannot pick up the difference. That means either workers are not paid adequately (which this rule’s enforcement will address) or there is a decrease in quality (and amount) of services available to people with disabilities. For many, this makes the difference of whether they can live independently at all.
Obviously, there was significant pushback from the disability community as well as agencies providing services, including Congressional hearings and legal action.
The Overtime Final Rule became effective on December 1, 2016. However, the Department of Labor is implementing a limited non-enforcement policy for providers of Medicaid-funded services for individuals with intellectual or developmental disabilities in residential homes and facilities with 15 or fewer beds. This non-enforcement period will last until March 17, 2019. The idea is to give agencies (like DOL and HHS) and federal and state agencies and policymakers to better coordinate and understand the potential unintended consequences and ensure that the lives of people with disabilities and their ability to live independently are not harmed.
Of course, it isn’t over. This is merely a delay of implementation. Also, on the legal front, on November 22, a federal district court judge issued a preliminary injunction (State of Nevada v. United States Department of Labor (E.D. Tex., No. 4:16-CV-00731)). On December 8, the US Court of Appeals for the 5th Circuit granted the Department of Labor’s request for an expedited hearing of its overtime rule appeal. Of course in “judicial time” expedited means that the case won’t even be heard for several months, and it’ll take even more time beyond that for the case itself. What that means is that the Trump Administration and Congress could choose to repeal the rule, or at the very least, direct the Department of Labor to drop its legal appeal.
USDOL Overtime Rule: https://www.dol.gov/whd/overtime/final2016/index.htm
Time Limited Non-Enforcement Policy for a Subset of Medicaid-Funded Providers : https://www.dol.gov/whd/overtime/final2016/nonenforcement-faq.htm
Federal Register Announcement for Non-Enforcement: https://www.federalregister.gov/documents/2016/05/23/2016-11753/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and
Disability Rights and Labor: https://arineeman.com/2016/05/25/labor-and-disability-rights-a-chicken-and-egg-problem/