Overtime Rule Proposal Raises Concerns

In a move to expand overtime pay to millions of salaried workers, the U.S. Department of Labor (DOL)’s proposed rule, issued in September, has sparked concerns among disability service providers. Last week, in comments to DOL, ANCOR argued that the rule, which would impact approximately 3.6 million workers nationwide, could inadvertently lead to significant cuts in services for people with intellectual and developmental disabilities.

The proposed changes would require employers to pay overtime to most salaried workers earning below the specified threshold for hours worked beyond 40 in a week. ANCOR argues that these alterations could have profound consequences for individuals with developmental disabilities seeking community-based services without adequate funding to support the increased overtime threshold. According to an Avalere Health report, the rule could impose over $1 billion in additional expenses for disability service providers in the first year alone.

The critical issue arises from the heavy reliance of disability service providers on Medicaid funding. Without corresponding adjustments in Medicaid reimbursement rates, providers find it challenging to increase wages for their workforce. ANCOR’s CEO, Barbara Merrill, emphasizes that raising the salary threshold without a plan for additional funding could force employers to make severe cuts to programs and services, potentially leading to increased unemployment within the workforce that the Department of Labor aims to protect.

ANCOR is actively urging DOL to collaborate with federal agencies and stakeholders to ensure that the proposed changes consider the unique challenges faced by service providers, allowing them to meet any new requirements without jeopardizing the critical services they provide to people with intellectual and developmental disabilities.