The group of about a 1,000 people with developmental disabilities, their caregivers and family members gathered Friday outside the state office building in Hauppauge, holding placards that read “Fully Fund the $15” and chanting “Please be fair to direct care.”
A little more than two weeks earlier something similar took place at the Yes We Can Community Center in Westbury when Gov. Andrew M. Cuomo took the lectern and told the roaring crowd of about 500 mostly union workers that “this is about fundamental fairness.”
The governor was on the third leg of a downstate tour on Feb. 23 to push for his proposal to raise the minimum wage to $15 by 2021. If the legislature approves, New York would be the first state in the nation to implement a $15 minimum wage across all industries, following an increase for fast food workers approved by the administration earlier this year.
But home care agencies and not-for-profit groups for the developmentally disabled are worried. They say they support the governor’s proposal, but most of their funding comes from state-funded Medicaid. If the governor doesn’t come up with money to offset the increase, they say they don’t know how they are going to pay the wages and stay in business.
“We want to raise the salaries of our direct service workers but you need money to do that,” said Margaret Raustiala, coordinator of the Alliance of Long Island Agencies, which represents 38 agencies that serve people with developmental disabilities.
Raustiala, whose son is autistic, said 90 percent of funding for agencies dealing with the developmentally disabled comes from Medicaid.
“I have a pit in my stomach,” she said. “How are we going to deal with this except to cut services?”
Caregivers also concerned
That sends chills into the likes of Kim Carbone of Westbury, whose three sons have autism. She was standing at the Hauppauge rally with her son Michael, 21, who is blind as well as autistic, and his caregiver, Valarie Clemens, 38, of Valley Stream. A single mother with a 11-year-old daughter who is sight impaired, Clemens said she earns $13 an hour as Michael’s caregiver working from 7:30 to 3:30 and then goes to another job at night. “We’re like family,” she said. But, she said, she needs to make more money.
Kim Carbone agreed. “Think how special someone like this is,” she said, gesturing to Clemens.
The administration has said it is aware of the issue. Cuomo spokeswoman Dani Lever said in a statement that the proposal “will not be implemented in one year but rather will be reasonably phased in over the course of five years and is structured to help employers adopt to a new system of paying workers a fair and decent wage.”
And in response to a reporter’s question recently about the impact of the increase on not-for-profits, the governor said, “We will take that into consideration in the budget.”
Assemb. Richard Gottfried (D-Manhattan), chairman of the Health Committee, said he supports the minimum wage increase — and Medicaid funding. “New York State should make sure that home care workers, those who work with people with developmental disabilities, and other human service personnel are paid at least as well as fast food workers . . . ” Gottfried said in a statement. “Since Medicaid and other state programs are the payer for many of these services, our budget should include adequate funding for these largely state-funded employers.”
Scott Reif, a spokesman for state Senate Majority Leader John Flanagan (R-East Northport), said in a statement, “We are currently listening to both sides of this important issue, and seeking credible information on the impact of another minimum wage increase in New York. The last thing anyone wants is unintended consequences such as higher prices for consumers, fewer jobs or small businesses being forced to close.”
But many agencies are not reassured.
Bob McGuire, executive director of United Cerebral Palsy of Nassau, said that 75 percent his budget goes to salaries and benefits for his 850 employees. Not only does he not have the money to raise salaries, he says, but he also worries about having to give increases to those on his staff already making $15 an hour. “If I have somebody in a supervisory role making $15 an hour working here for 20 years and some high school kid is going to walk in and make that off the bat, what am I going to do about that?”
NYSARC, the state’s largest not-for-profit organization supporting people with developmental disabilities, which includes AHRC in Suffolk and Nassau, said the increase would cost its agencies $270 million in the first year and $1.7 billion in added labor costs by 2021. In Nassau that would mean a $6 million hole in the first year and 146 jobs potentially at risk. In Suffolk, it could mean $2.7 million in the first year and 126 jobs, NYSARC said.
NYSARC’s executive director, Steve Kroll, said that lack of added funding would put agencies “on a quick pathway to bankruptcy. We support the $15 minimum wage, but the only way we can pay it is to increase Medicaid funding.”
Home care agencies say they would face a similar problem. The New York State Association of Health Care Providers, which represents about 400 agencies statewide, estimated that a minimum-wage hike would cost the industry more than $1.1 billion over two years.
“We would really like to pay,[the minimum wage increase] but the issue right now is keeping the doors open,” said Laura Haight, policy director for the association. She said about 85 percent of funding for most home health agencies comes from Medicaid.
Overtime already a worry
The home care industry is already struggling with two other issues. In October a federal rule went into effect requiring home care agencies to pay overtime based on what employees earn, not based on a minimum wage, costing agencies statewide about $45 million. Haight said the state has promised to give agencies some emergency funding, but it hasn’t happened yet.
And on Long Island, in New York City and Westchester County, home care agencies, under the state’s 2011 Home Care Worker Wage Parity Law and county living wage laws, already pay a base wage of $10 an hour plus $3.22 for supplemental wages or mandatory benefits — more than the state minimum wage of $9. On Long Island, the first-year increase to $9.75 wouldn’t have any impact “but as the wage moves up to $15 an hour the impacts would be significant,” Haight said.
The federal overtime rule has already had an impact on home care. Many agencies said they have had to cut back on overtime, instead sending other employees to fill the gaps. Rick Schaefer, president of the Long Island chapter of the state health care providers association, said the rule has meant an minimum increase of $1.50 an hour, to $15 an hour for overtime. As chief operating officer at Better Home Health Care Agency in Rockville Centre and Forest Hills, he said his agency — which pays more than the minimum wage — has cut overtime from 18 percent of its total hours to 12 percent.
Having to use other employees to avoid overtime has upset some patients and their families.
Debbie Schoenholz, 58, suffers from a rare degenerative genetic disorder that has left her legally blind, in a wheelchair and on a feeding tube in her Lynbrook home. Until recently, her brother, Marc Schoenholz of Randolph, New Jersey, said, she had one aide from Gurwin Home Care Agency in Farmingdale — being paid overtime — with whom she had developed a close relationship and who was familiar with her routine and all her medications.
Now, he said, she has two or three. “It upsets Debbie and it’s very challenging for the aides as well,” he said, who have to familiarize themselves with her many medical requirements.
Patrick Donnellan, chief financial officer for Gurwin, said things could get worse if the minimum wage increase does not include more Medicaid funding.
“It’s an unfunded mandate,” he said. “I believe you are going to see in home care a lot of closures. The smaller agencies will fold and you will see patients going without caregivers.”
Asked if he believed Gurwin, with its 275 home health aides, could face such a future, Donnellan hesitated before answering:
“If we have wage cost increases without reimbursements, yes. The arithmetic doesn’t work.”