Local Minimum Wage Ordinance - Rate Adjustment Options
Date: July 2, 2018
To: Service Providers
From: Ernie Cruz, Director of Community Services
RE: Local Minimum Wage Ordinance – Rate Adjustment Options
Effective July 1, 2018, the County of Los Angeles enacted a minimum wage ordinance which increases the minimum wage in the unincorporated areas of L.A. County to $13.25 per hour for employers with 26 or more employees and $12.00 for employers with 25 or less employees. The City of Pasadena has adopted a similar ordinance which also became effective 7/1/18. Service providers who have staff providing services in these areas, and who are paid minimum wage are expected to comply with this ordinance.
For service providers affected by these ordinances, there are options available to seek additional funding in order to implement this change. It is important to note though, that any funding approved and allocated by DDS will be solely to meet a service providers’ payroll costs to increase employee/staff wages to the new minimum wage. Administrative costs are not allowable. The following options for seeking additional funding to meet the local minimum wage ordinance are available, based on the type of service you provide:
Unanticipated Rate Adjustments - Community-Based Day Programs & In-Home Respite Agencies
Service providers’ classified as day programs, including infant programs (service code 805), adult day programs (505, 510, 515) and independent living services (520) and in-home respite agencies (862) may request a rate adjustment from DDS if any employees/staff are paid less than the new minimum wage. The aforementioned service providers should submit to the DDS Community Rates Section, an Unanticipated Rate Adjustment as delineated in the California Code of Regulations, Title 17, Section 57920 & 57922. It is important to note that unanticipated rate adjustments must be submitted to DDS no later than 60 days from the date the change occurred, July 1, 2018. SG/PRC recommends utilizing the minimum wage excel spreadsheet to document the cost basis for the rate increase.
DDS has 50 days, from the time of receipt of the rate adjustment request to make a determination. Any questions related to the submission of an Unanticipated Rate Adjustment should be directed to the DDS Rate Section at (916) 654-2300 or firstname.lastname@example.org.
Health & Safety Waiver Request for Service Providers with Rates Negotiated with SG/PRC
For service providers, whose rate is negotiated with SG/PRC, the available option to seek an increase is by submitting a Health and Safety Waiver Request to SG/PRC for each individual affected by the rate increase. Service providers must send a letter to SG/PRC with the following information:
- Description of the health and safety concern to the individual or group of individuals (all individuals in the group must have individual descriptions).
- Description of how health and safety may be affected if rate is not increased.
- Documentation of the cost basis for the rate increase with an explanation of how it will mitigate the risk to the Health and Safety of the individual or group of individuals. The Local Minimum Wage Ordinance Spreadsheet can be used to document the cost basis for the rate increase being sought. Back up documentation must include a copy of the payroll register (3 months), DE2088 and workers compensation rate letter.
- Information as to the availability of alternative comparable local resources to meet the needs of the impacted individuals.
- Detailed verification that the alternative services (ex. 1:1 staffing support, different vendor) have been considered, including the staffing augmentation specific to the risk mitigation for a consumer or group that might be provided under another vendor code and that such alternatives do not exist and/or are not appropriate.
- Detailed documentation that the rate increases is the most cost effective and consumer centered strategy to mitigate the identified risk.
- A copy of the applicable local minimum wage ordinance(s).
SG/PRC requests that eligible service providers submit their Health and Safety Waiver Exemption requests to SG/PRC within 60 days of July 1, 2018. Please note that although SG/PRC will accept requests for Health and Safety Waiver Exemptions from eligible service providers after the effective date of the local minimum wage ordinances, the final decision regarding the effective date of the Health and Safety Waiver Request will be determined by DDS. Any questions related to the submission of a Health and Safety Waiver Request should be directed to SG/PRC Community Services at (909) 622-7722 or email@example.com.
If you choose to request a rate adjustment, please remember to review the impact of the ABX2-1 rate increases prior to your request.