Written by Elizabeth Lanza Friday, 06 August 2010 00:00
Legislature Hears Employers’ Protest – Dismisses Plea
On July 26, a special session of the Nassau County Legislature was held to vote on the one dollar per hour salary raise promised to home health care workers employed by agencies that have contracts with the county, as per Nassau’s Living Wage Law. After debating a bill to put off the raise, legislators voted to leave the increase intact as scheduled for August.
In 2006, the Living Wage Law was unanimously passed by the Legislature. The law provided for a phased-in salary increase from $9.50 per hour to $12.50. The last one dollar increment had been scheduled to go into effect on Aug. 1, however, there has been much opposition from health care employers, who claim that the increase in cost will be unmanageable for them, and will result in layoffs.
Responding to this plea from the health care employers, NC Legislature Presiding Officer Peter Schmitt introduced a bill to delay the pay increase, allowing the employers to make their case before the Legislature. The bill proposed a raise based on the consumer price index or CPI, which would be about 18 cents as opposed to the mandated one dollar. It also proposed a six-month moratorium on the full Living Wage increase. This extra time was meant to allow the health care industry time to address problems they have been saying they experience at the state level that they say make another increase unbearable. The complaint is that New York State has been cutting what it pays the companies while also adding new taxes and costs to operation.
Presiding Officer Schmitt told Anton Community Newspapers, “I introduced this bill because of the disgraceful way the State of New York has turned its back on Long Island, with MTA cuts, the MTA payroll tax… now these home companies have had their reimbursement rate cut by the state while our cost to them is going up… That is a premise for discussion. They said no one else is listening. So, we let them make their case.”
The current living wage for Nassau contracted employers is $13.10 an hour or $11.50 with health benefits. On Aug. 2, this rate has been scheduled to go up to $14.16 an hour or $12.50 with benefits. Although an increase of only $1 does not seem like a lot to some at the hearings, representatives that testified on behalf of the agencies said that this increase would translate into a major problem.
Bob Callaghan, for instance, a representative of the New York State Association of Health Care Providers, a trade organization advocating for providers, testified that the 35 county approved agencies serve about 3,000 families and employ about 5,000 people. Callaghan and others speaking on behalf of employers, spoke to the idea that with an increase in salaries there would be ramifications and jobs lost.
However, both Democratic and Republican legislatures said that they needed specific details on exactly how many jobs would be lost if they went ahead with the increase. Legislators indicated that the agencies failed to come up with the concrete numbers they were looking for, and this swayed Monday’s vote to keep the raise as scheduled.
“We gave these providers one last opportunity to make their case that hardship would result from an increase. They failed,” Schmitt said after the hearing. “Everyone on the legislature agreed that they didn’t do it. There was no specific example of ‘agency x will turn back this number of county contracts,’ or ‘agency y will lay off this many workers.’ So we rejected the item and the wage goes into effect.”
Legislator Diane Yatauro, who serves as the Democrats’ minority leader, fought hard to make sure that the raise would go into effect, saying, “We are talking about hardworking people who earn approximately $22,000 per year performing tasks that most of us would shy away from. Keeping this one dollar commitment was not going to place anyone in jeopardy. It was simply the right thing to do.”
Lisa Tyson, director of the Long Island Progressive Coalition, testified at hearings and spoke out against the bill that would put the raise on hold. Tyson said, “The Nassau County Legislature did the right thing. Workers who do work for the county have been living on poverty wages and desperately deserved the raise. The health care companies should not balance their budgets on the back of workers. We thank the Legislature for doing their research and proving that the increase will not result in layoffs.”
Bob Callaghan expressed frustration on behalf of the health care employers, who he believes did make a sound case. He told Anton Community Newspapers after the hearing, “We are definitely disappointed. I thought we did a fairly decent job presenting our bottom line to the Legislature. We included a graph that showed pro forma that the business model doesn’t work with this increase.”
Callaghan believes the decision came down to politics. “They just didn’t want to hear it,” he said. “I think that between the sensationalism and the vocal union participation, it was a lot easier to just walk on this one.”
He added that the local health care industry should “weather” the pay increase but layoffs could be coming. Smaller agencies will be impacted the most, he said. But, many might qualify for a waiver from the Living Wage requirements.
“We’ll probably see a lot of waiver applications quickly coming in,” said Callaghan. “Agencies are considering other strategies open to them in order to avoid layoffs. I haven’t heard specifically yet of anyone turning in contract or laying folks off at this point. But that could be down the road a little bit.”
Schmitt said after the hearing that as a result of this experience, he will not support future pay mandates, sharing, “I am not passing any more automatic increases unless they are [based on the] cost of living. It is wrong to dictate specific dollar amounts for the future when you don’t know what the future holds.”