The Oregon Department of Human Services has sketched out some policy proposals that would cut in half the state’s costs for adhering to the Obama administration’s new interpretation of the Fair Labor Standards Act, which requires that home care workers be paid at least minimum wage for all hours worked and overtime for any hours above 40, starting Jan. 1.
Because Oregon’s senior service and developmental disability programs are so heavily reliant on care delivered in the home, particularly a live-in caregiver program, the projected cost to the state’s general fund had been significant -- $38 million a year -- and Gov. John Kitzhaber had requested and received a six-month delay from U.S. Labor Secretary Thomas Perez.
Under the proposed changes outlined in Salem on Thursday, the new cost to the state’s general fund would be about $19 million a year, starting with the new budget on July 1, 2015.
By far the biggest savings -- $17.5 million -- would come from the biggest cost-driver, the live-in program, which would be limited to just those clients who are determined to need at least 135 hours of assistance a month. Anyone with lesser needs would be shifted into the program that pays workers by the hour, although the worker could still live with the client during non-work hours.
Hourly workers will get paid $13.75 an hour before overtime while live-in caregivers will get the new Oregon minimum wage of $9.25 an hour for non-overtime hours, which is actually much higher than the sub-minimum wage they now receive for some of their hours.
The state would also stop allowing new clients in need of a full-time live-in caregiver to have just one caregiver every day of the week. DHS manager Jane-ellen Weidanz said the state would not stop existing clients from having a seven-day caregiver if they qualify for the program.
52-Hour Cap Possible to Limit Overtime
Of the other proposals, a limit on the percentage a homecare worker can receive for travel time was set at 10 percent, except in rural areas -- a point that reached general consensus. The state also wants to cap overtime hours at 52, while allowing for a number of emergency exceptions.
In some ways, the federal rules force the state to tighten what may seem as lax management of the program. Without a cap on hours, one worker was employed at a whopping 643 hours a month, or 21 hours a day. The state would save $5,400 a month in overtime just by limiting this woman to 52 hours a week. Weidanz said this worker was caring for her mother, who required such intensive care that the daughter could sleep uninterrupted for only four hours a day.
“Is that really a safe plan for the client?” she conceded.
The draft proposals are far from settled, however. Jereme Grzybowski, a labor representative from Service Employees International Union Local 503, pushed back on some of the service changes, particularly one that would limit overtime hours to 52 hours a week. An earlier discussion had suggested setting a cap at 60 hours, but Weidanz argued the state would lose much of the $1.5 million annual savings to the general fund if the cap was placed higher than 52.
Capping the number of possible hours at 52 would require the state to recruit more than 500 new home care workers and personal support workers -- the name given to those who care for people with developmental disabilities. The cap would be waived in shortage areas, which Weidanz said were those parts of the states away from Interstate 5, but Grzybowski said there were not enough qualified people anywhere in the state to handle the need.
“You have to pay overtime if you don’t have a work force,” Grzybowski argued.
Independent Choices Program
But Grzybowski reserved most of his pushback for suggestions that the state expand its Independent Choices Program as a means to get out of paying overtime for home care workers.
Under the standard home care program, the state handles payroll and other administrative services for the elderly client, but in the Independent Choices Program, the client is given cash based on determined need, and purchases their services with that money. Among other things, it allows the client to hire a spouse to do the work without worrying about the tight federal restrictions under the standard program.
Oregon’s home care program has roots in paying family members to provide care for their loved ones, while strict federal rules prohibit the hiring of spouses for all except the most severe cases, particularly those with a progressive, terminal illness such as amyotrophic lateral sclerosis or Parkinson’s Disease. Weidanz said fewer than 100 people were employed to care for their spouses in the standard home care program. “We don’t track other relatives,” she said.
The state believes it may be relieved of its status as a shared employer in the Independent Choices Program, and the new labor rules for overtime do not apply to an elderly person who hires someone directly without state interference. But SEIU disagrees with this interpretation of the law, and the Oregon Department of Justice has not offered DHS its legal opinion. Any savings from this shift would be above and beyond the $19 million annual savings from the other program changes.
Workers employed through Independent Choices could also lose their eligibility for a state insurance program and earned paid time off.
“We shouldn’t be doing that just to save money,” Grzybowski told The Lund Report. “We don’t need to go back to those days.”
DHS has scheduled another meeting with stakeholders for Nov. 20, with the plan of putting tentative policies in place in time for the governor’s budget in December.
Chris can be reached at [email protected]
