Lorraine McCormick, Senior Professional in Human Resources and a Past President
of The Arc gave a presentation at our Executive Forum on recent Department of
Labor (DOL) rule changes. These changes impact community supports/services at
The Arc has recommended to the Administration that to avoid this financial impact
on providers and individuals, they need to increase funding at rates that enable
providers to meet the new DOL rules.
There are two DOL rule changes that will increase costs to traditional and non-
traditional providers in Illinois.
Exempt status annual salary levels increasing to $50,440 from $23,660
Companion services no longer exempt and now under minimum wage and
Community providers are already experiencing 20 to 25% staff vacancy
rates because wages are no longer competitive in their communities.
High staff vacancies require more overtime.
Issue One: A majority of provider employees are considered exempt, as per the
duties test, and will now have to be reclassified as non-exempt due to the high
salary level requirement. Providers require exempt employees to be available
24/7 to respond to program needs. These employees often work in excess of 40
hours per week due to increases in caseload size, high turnover, client crises, etc.
Often times, they respond to phone calls, answer emails, and complete other
business duties while not present at work. With the new rules, these employees
will be required to record all hours and be paid overtime for each hour worked
over 40 in a week. Providers cannot afford to pay the wages needed to recruit
and retain talent at the current rates provided.
Additionally, smaller non-profits employ executives, including CEOs, who fall
under the $50,440 minimum. These executives will also need to be paid
overtime for all hours worked over 40.
This new requirement will also create an administrative burden on all providers
to comply with recordkeeping requirements; many will have to hire additional
personnel solely for this purpose.
Issue Two: The companion changes, also exempt now, are especially harmful
to the small creative living arrangements we are trying to expand that are more
person centered and have less administrative costs. These arrangements do not
require 24/7 coverage. This will all change under the new rules.
Shared living arrangements, where people thrive in their own homes with the
support of a roommate, will have to function as a business requiring companions
to “punch a clock” whenever the person needs them for support.
Providers will have to schedule other paid personnel to “”work” in the individual’s
home to avoid overtime expenses. Not only will this be disruptive to everyday
living, the support he/she receives will be compromised with a multitude of new
faces invading his/her home.
Here are some additional materials from my presentation including the effective
date for rule changes and whether compensation is considered taxable income.
Also the information sheets with bullets detailing the presentation, some fact
sheets, slide show, and administrative interpretations from the DOL on
companion services you can share with participants.