Tuesday, March 11, 2014

IHSS Budget: FLSA & 7% Across-the-Board Cut

March 7, 2014 
The Honorable Ellen Corbett
Chair, Senate Budget Subcommittee #3 State Capitol
Sacramento, CA 95814

RE:    IHSS Budget: FLSA & 7% Across-the-Board Cut

Dear Senator Corbett;

The In-Home Supportive Services (IHSS) Coalition has two budget priorities: (1) we are emphatically opposed to the Governor’s budget proposal to impose a cap on providers to no more than 40 hours of work a week to avoid paying overtime, and (2) we urge the legislature to repeal the 7% across-the-board cut to IHSS hours. The IHSS Coalition is composed of forty-nine organizations representing IHSS consumers, providers and advocates. Our goals are (1) to ensure sufficient funding for In-Home Supportive Services and its interrelated aspects (2) to develop potential improvements for the program, (3) to disseminate information on homecare issues through public events and our website, and (4) to preserve and enhance consumer-directed services.

IHSS keeps Californians with disabilities, including seniors, in their own homes and saves taxpayers hundreds of millions of dollars in doing so. The IHSS program provides personal care and domestic services to approximately 440,000 individuals who are aged, blind or have disabilities, which allow these individuals to live safely at home rather than in unnecessary, not desired and more costly out-of home placement facilities. IHSS is a critical component of long-term care services in California.

By definition, IHSS consumers are very poor; the vast majority has monthly incomes less than $1,000 and $2,000 in personal assets. According to the California Department of Social Services (CDSS), approximately 85% of all IHSS consumers receive SSI/SSP. The current maximum monthly SSI/SSP grant for elderly and disabled individuals is
$877 per month and the maximum grant for couples is $1,478. The average IHSS consumer receives 89.5 hours of service a month.

7% Across-The-Board Cut

Last year, the legislature adopted the provisions of a settlement agreement to resolve two class-action lawsuits related to IHSS cuts that were previously enacted: Oster v. Lightbourne and Dominguez v. Schwarzenegger.  The cuts that were subject to these lawsuits were enacted when the state was dealing with significant budget deficits and, if implemented, the reductions would have been devastating to IHSS consumers and providers.

The settlement agreement and related implementing legislation repealed those reductions and established an 8% across-the-board cut that took effect on July 1, 2013. Under current law, the 8% cut will be replaced with a 7% across-the-board cut on July 1, 2014.  The settlement agreement also included a provision to “trigger off” the ongoing 7% reduction–in whole or in part–if the state receives enhanced federal funding  pursuant to an “assessment” (likely a fee or tax) on home care services, including IHSS.

The 7% across-the-board cut hurts IHSS consumers and providers. A consumer assessed as needing the average number of monthly hours lost 6 of those hourstime which was needed for laundry or bathing or grocery shopping. A consumer who is assessed as needing the maximum number of hours283lost 20 hours of help per monthmore than two days of personal care or domestic services. The need didn’t go awaybut the help did.

Consumers have suffered disproportionately in recent years, with the IHSS hours cut compounded by cuts to SSI and Medi-Cal services, which are not proposed for restoration in the proposed budget.

Given the vastly improved fiscal situation, the legislature should restore the hours which consumers need to remain safely in their homes.

Fair Labor Standards Act

On September 17, 2013, the U.S. Department of Labor issued final regulations, effective January 2015, that apply the federal minimum wage and overtime protections of the Fair Labor Standards Act (FLSA) to most of the two-million-plus home care workers in the United States. The new rules significantly narrow the “companionship exemption” that has long excluded home care workers from basic federal wage and hour protections.  The Governor’s budget proposal would circumvent the new federal rule that requires additional overtime pay for domestic workers by prohibiting all IHSS providers from working more than 40 hours a week. Currently, IHSS caregivers can work more than 40 hours a week but are paid straight time for working the extra hours.

The Governor’s proposal, if enacted, would be devastating to IHSS consumers and providers.  The following consequences are sufficiently compelling for the legislature to reject this budget proposal and appropriate sufficient funds to pay overtime to IHSS providers.

·       Continuity of Care: The overtime prohibition would force those who have an IHSS provider working more than 40 hours a week to find someone else to work the hours above 40. Seniors and people with disabilities who require care beyond 40 hour a week would be forced to rely on temporary or alternative caregivers with less experience and familiarity with their unique needs.  Especially concerning are the impacts on children and adults with disabilities for whom consistency is an essential part of care, including people with dementia who can suffer adverse consequences in the hands of unfamiliar caregivers.

Almost two-thirds of IHSS recipients receive care from a provider who is related to them. Moreover, about 46 percent of IHSS recipients receive care from either their own parent, spouse, or adult child (defined as a “close relative”). In about half of cases, IHSS providers live in the same home as the IHSS recipient. When IHSS services are provided by a person having the legal duty to provide for the care of his or her child, the parent provider will receive payment for IHSS only when that person leaves full-time employment or is prevented from obtaining full time employment because no other suitable provider is available, and, if care is not given by that person, the child may be subject to inadequate care or inappropriate placement.
·       IHSS providers are not interchangeable: Personal care is very private. Consumers, including seniors, have strong preferences and needs when it comes to the people who do this work. Some consumers are monolingual in a language other than English; some prefer a worker of one gender, or from a similar cultural background. Some will not accept care from anyone other than a spouse or family member or other trusted provider.

Consider the parents who have been the sole caretakers for their children, with significant disabilities, for years or decades. Those parents will lose the income which has provided a roof and stable life, will have to go find other work while leaving the child in the hands of a stranger.

·       Consumer choice is a cornerstone of the IHSS program, which will be deeply eroded by this proposal. IHSS consumers have the right to hire, fire and supervise their provider and they take into consideration their unique language needs along with the intimate nature of personal care service.  Consumers often train their IHSS provider to handle their personal care services.  Imposing a 40-hour cap per provider to avoid paying overtime would force consumers to hire new providers and, by doing so, could put themselves at risk for substandard care because the new provider would not be familiar with their unique needs.

·       Availability of workforce: The Governor’s proposal assumes that somewhere around 30,00050,000 Californians, who are not now IHSS home care workers, will somehow be willing and available to do this work. There is no factual basis for this assumption. In rural California, often the only available person to provide care is a family member.

·       Availability of workers for new Provider Back-up System: The governor’s budget assumes the construction of a new system of back-up workers, who would be available, on short notice, to fill any unexpected needs of consumers who are unable to have their scheduled provider perform the needed work. The challenges and expense of such as system are underestimated; nowhere has such a service been created on anywhere near the scale required.

·       Reductions to provider income/consumer household income: By prohibiting work after 40 hours, the proposal sharply limits the ability of caregivers to provide for their families.  The sole source of income for 63% of providers is from the IHSS program. Because of the loss of hours, IHSS providers would lose income. IHSS providers who are living near or below the poverty level will be severely impacted by these cuts. Many providers are eligible for food stamps, and few have access now to health insurance.  Many IHSS providers would lose their health benefits because the cut in hours could put them below the eligibility levels to qualify for health benefits through their Public Authority.  In about half of cases, IHSS providers live in the same home as the IHSS recipient.  The loss of income to the provider would impact the overall household income, leaving the consumer with insufficient funds to pay rent.  The unintended consequence could force many IHSS consumers to move out of their homes and into institutional care.

·       Olmstead considerations: In its 1999 Olmstead decision, the US Supreme Court confirmed that unnecessary institutionalization of people with disabilities violates their civil rights. Insofar as consumers’ homes and care are disrupted by the overtime ban, and consumers face otherwise unnecessary institutionalization, the state will be defying the Olmstead mandate.

·       Concerns with the administration’s proposal:

o   Workweek arrangements funding for county IHSS administrative costs for social workers to respond to questions from consumers and providers about the new overtime policy and workweek arrangement may be
understated.  Counties and Public Authorities experienced a high volume of calls and walk-ins by consumers and providers with problems and questions about the new timesheet for CMIPS II. Lessons learned by the pilot counties and Public Authorities were helpful through the conversion process to help as new counties and PAs cut over to CMIPS II.  The budget proposal assumes implementation for all 58 counties on January 1, 2015and there won’t be any pilot process to develop best practices.  Hence, the workload may be much higher than anticipated by the administration to explain the new overtime policy and establish workweek arrangements between consumers and providers.
o   Insufficient information about the Provider Back-up SystemThe administration has not provided data in written format on the number of providers who currently work more than 40 hours a week.  We got a verbal report from CDSS on January 17, 2014, but the information was confusing and we asked for documentation that hasn’t been released to date.  Because

providers must be trained to provide paramedical services by physicians and other medical practitioners, back-up providers would not be allowed to provide these critical services.
o   Two-Strikes and You’re Out:  The administration is proposing to terminate IHSS providers with 4 hours of unauthorized overtime on a second offense for one year.  This proposal is very harsh and generates a number of questions.
§  IHSS providers receive their new timesheet with the paycheck from the prior pay period.  If there is a problem with processing a timesheet, the provider doesn’t get a paycheck in a timely manner and also doesn’t receive a timesheet for the next pay period.
§  Could a provider be terminated if they simultaneously submit timesheets for multiple pay periods where overtime was worked and therefore compensable at premium pay?  What is the “lag” time between a warning notice being sent to providers and the system flagging the event as a “first” or “second” strike?  The concern is that providers could be terminated without receiving sufficient notice.
§  CDSS has stated that all enrollment requirements would kick-in if an individual wishes to re-enroll as an IHSS provider after their 1-year penalty period has expired.  This means providers would have to pay for another criminal background check and attend orientation again.
§  Provider appealsCDSS indicates they intend to establish an appeals process for providers to pay out the reason/justification for unauthorized overtime so that a terminated provider could be reinstated. There are no details and the administration indicated input would be obtained through a stakeholder process.
§  Wait time during medical accompaniment & travel timeThe FLSA regulations require payment of wages for actual time spent by a provider who is assigned to more than one client per day and for wait time while accompanying a consumer to a medical appointment.  The Governor’s budget appropriately designates funds to comply with these provisions of the FLSA.

Closing Comments:

After many years of budget deficits, California is experiencing higher revenues than projected in the 2013-14 budget, with an additional $6.3 billion in unanticipated revenue from 2012-2013 budget through 2014-2015 budget.  State revenues are coming in higher than these projections, so it’s likely that the surplus will be greater than seven billion dollars. This sizable surplus provides the legislature with the resources to repeal the 7% cut and comply with the federal FLSA regulations by paying overtime.

This year, we need all of you to do what you know is rightand what you've done before: Stand up for the California consumers of IHSS, their families and the workers who provide their much-needed care. We call on you to reject the Governor’s proposal

to cap provider hours to avoid paying overtime and to repeal the 7% across-the-board cuts.
Sincerely, AARP-California
Access to Independence
ACLU of Southern California
Alzheimer's Association, California Council California Alliance for Retired Americans (CARA) California Association of Public Authorities (CAPA) California Church IMPACT
California Council of Churches
California Council of the Alzheimer’s Association California Council of the Blind
California Disability Community Action network (CDCAN) California Foundation for Independent Living (CFILC) California IHSS Consumer Alliance (CICA)
California Senior Legislature
California State Council on Developmental Disabilities California United Homecare Workers (CUHW) Californians for Disability Rights, Inc. (CDR)  Communities Actively Living Independent & Free (CALIF) Congress of California Seniors
Dayle McIntosh Center for the Disabled Disability Rights California (DRC)
East Bay Community Law Center FREED Center for Independent Living Friends Committee on Legislation Gray Panthers
Independent Living Resource Center Inc.
Independent Living Services of Northern California (ILSNC) Marin IHSS Public Authority
National Senior Citizen’s Law Center Nevada-Sierra-Plumas Public Authority Northern California ADAPT
Older Women’s League
Personal Assistance Services Council of Los Angeles Resources for Independent Living
San Francisco IHSS Task Force San Francisco Public Authority SEIU Local 521
SEIU United Healthcare Workers West

SEIU United Long Term Care Workers Senior & Disability Action (SDA)
Service Employees International UnionState Council Silicon Valley Independent Living Center (SVILC) Southeast Asia Resource Action Center | California Office The Arc and United Cerebral Palsy in California
The San Diego IHSS Coalition
Tri-County Independent Living Center, Inc. UDW /AFSCME Local 3930
Westside Center For Independent Living (WCIL)

cc:      Members, Senate Budget Subcommittee #3
Jackie Wong, Office of the Senate President Pro Temp Samantha Lui, Consultant, Senate Budget Committee Chantelle Denny, Senate Republican Fiscal Office
Matt Paulin, Program Budget Manager, HHS, Department of Finance Will Lightbourne, Director, California Department of Social Services Michael Wilkening, Health and Human Services Agency
Rashi Kesarwani, Legislative Analyst’s Office