In Response to the Federal Overtime Rule!

April 25, 2024

The following is our message to key members of the Legislature and Administration which was delivered this morning:


“It would not have occurred to me that I would again be asking for an increase in Medicaid rates for services at this stage of the process, but on April 23rd  the Feds threw us a curve ball and since the budget is now “open” again, it would be negligent for me to pass up an opportunity.

 

“Earlier this week the Federal Department of Labor published the “final rule” changing the Fair Labor Standards Act requirements for eligibility for overtime pay.   Without going into the details (I have attached some additional information for reference); the base wage which determines the eligibility for an employee to be “exempt” for being paid overtime will increase as follows:

  • Current wage (below which overtime pay is required for hours worked more the 40 per week): $685/week ($35,568/year)
  • July 1, 2024: $844/week ($43,888/year)  which is a 23% increase!
  •  January 1, 2025: $1,128/week ($58,856/year which is an additional 34% increase or a total of 65% in less than a year!

  

“While this will not impact direct care staff (who are currently overtime eligible), it will – based on a very quick survey of our members –  impact program supervisors, and mid-level administration (in one instance also the owner/director of the company!).   This is not an insignificant number of individuals, especially with the pressure on quality and compliance which is a direct result of the DOJ consent order.  And with shortage of direct-support staff continuing, the oversight responsibility often involves covering shifts, assisting when medical care is required, or providing on-site supervision outside of “regular hours.”  

 

“Most members seem confident that the increase required in July will be a  non-issue, but the increase required in January (before the FY26 budget can be amended) will have significant impact from mandated salary increases and the increases caused by salary compression.

 

“Obviously this was not a mandate that we anticipated (and we had worked very hard at the national level to mitigate the impact); but, it is now in place!  We appreciate the 3% rate increase for FY25 and the additional 3% for FY26 that you approved in the enrolled budget.  We also appreciate that this would have helped providers to expand services to provide options for the individuals receiving the “new slots.” 

 

“At this point, the additional costs associated with this federal mandate will take priority and will significantly impact our ability to expand capacity.   We have not had the time, yet, to complete even preliminary calculations of the cost, but the DOL Fact Sheet on their projected impact is attached. 


ANCOR Fact Sheet

DOL Fact Sheet

DOL FAQs on Impact