Search

800.241.4949 Crisis Info

DETROIT WAYNE MENTAL HEALTH AUTHORITY

FY 2015-16 Direct Care Worker Wage Increase

Text Size

 

 

Beginning January 1, 2016, Detroit Wayne Mental Health Authority (DWMHA), in cooperation with its MCPNs and provider networks, initiated a network wide pay increase for non-professional, direct care workers (DCW) who routinely provide any of the following services: Personal care, community living supports, skill building, supported employment and/or respite services.   Certain supervisory staff in licensed homes, who also provide the direct care services listed above, are eligible for the wage increase (for example, workers with titles such as Supervisors, Medical Coordinators, and Home Managers, may be included if they routinely provide the services listed above).

Information for Direct Care Workers:

  • The increase for each qualified DCW will be for $1.00 per hour above the hourly rate earned in December 2015.
  • The increase is inclusive of and NOT on top of any increase required due to the change in the state’s minimum wage effective January 1, 2016.
  • Therefore, if a direct care worker received the state-required minimum wage increase of $0.35 from $8.15 to $8.50 per hour during the final pay period of December 2015, and if the pay period included at least 1 day of January 2016, then the DWMHA-required wage increase would be an additional $0.65 increase, bringing the total wage increase to $1.00 per hour.
  • The minimum wage for all covered DCW (including those hired after January 1, 2016) will be $9.15 per hour instead of the new state minimum wage of $8.50 per hour. The previous state minimum wage was $8.15 per hour.
  • The increase will be payable for hours worked commencing January 1, 2016 (or for the first pay period beginning on or after January 1, 2016).
  • Direct care workers who are in a union or are part of a collective bargaining agreement are not required to receive this wage increase.
  • Direct care workers who work for a DWMHA-network provider at a service site located outside of Wayne County are not required to receive this wage increase for the hours worked outside of Wayne County unless their provider (employer) has agreed to do so. However, these direct care workers are eligible for the wage increase for all the hours they work at service sites in Wayne County.

Examples of how a $1.00 per hour increase would work: 

  • An existing DCW earns $8.15 per hour in December 2015; that DCW now earns $9.15 per hour in January 2016.An existing DCW earns $8.50 per hour in December 2015; that DCW now earns $9.50 per hour in January 2016. (However, if that direct care worker received the state-required minimum wage increase of $0.35 from $8.15 to $8.50 per hour during the final pay period of December 2015, and if the pay period included at least 1 day of January 2016, then the DWMHA-required wage increase would be an additional $0.65 increase, bringing the total wage increase to $1.00 per hour and that direct care worker now earns $9.15 per hour.)
  • An existing DCW earns $10.00 per hour in December 2015; that DCW now earns $11.00 per hour in January 2016.
  • A new DCW is hired on or after January 1, 2016; that DCW will earn at least $9.15 per hour in January 2016.

To ask any questions or share your concerns on how the DCW wage increase was rolled out - click this link to share your concerns with DWMHA.

 

FREQUENTLY ASKED QUESTIONS - 2016 Direct Care Worker Wage Increase

Introduction

In the spring of 2014 the Michigan Legislature passed a law to increase the minimum wage, from $7.40 per hour to $9.25 per hour by January 1, 2018. This will be done by increasing the minimum wage by small steps each year.

The Legislature did not provide any additional Medicaid funding for the required wage increases for the estimated 44,000 direct care workers in Michigan’s public mental health system. Direct care workers care for and support some of the most vulnerable people in our state—people with intellectual and developmental disabilities, mental illnesses, and substance use disorders. 
 
The low wages for direct care workers were causing staffing shortages and high turn-over rates which undermined the quality of supports for people with disabilities. With the recent increases in the state minimum wage and the low wages for direct care workers, these jobs were becoming “minimum wage jobs.” Michigan’s direct care provider organizations are now competing for staff with fast food restaurants and large retail stores.
 
Do providers have to pay us the entire $1.00 wage increase all at once or can they break it up and pay us a series of smaller increases over time?

No, the wage increase can not be broken up or paid out over time. All eligible direct care workers should receive the entire $1.00 per hour wage increase, effective January 1st, 2016.

How will DWMHA and the MCPNs verify that direct care workers actually received the $1.00 per hour pay increase?
  • Direct care workers are to be made aware of details of this increase and urged to report non-payment issues to their employer (provider) and the appropriate MCPN. Direct Care Workers and providers can submit questions and comments directly to the DWMHA via a link on its website.
  • The MCPN shall attest that the direct care worker wage increase funds were appropriately sent to provider organizations monthly and that the MCPN received attestation from its providers that those providers received and paid funds to all eligible direct care workers.
  • Distribution and use of these funds will be subject to audit, therefore MCPNs and provider organizations are required to maintain appropriate records including proof of wage rates paid before and after the $1.00 per hour increase took effect.
I am an eligible direct care worker, why haven’t I received my pay increase yet?
  • This is a monumental task that involves the collaborative efforts of the MCPNs and the service provider entities. Given the challenge of implementing this wage increase for thousands of workers, it is recognized that the process may take some time for all workers to receive their increase. But if the wage increase is delayed for any reason, the payment of the wage increase will still be retroactive to January 1, 2016. 
  • Eligible direct care workers should receive their wage increase no later than March 31, 2016—however, the increase should be retro-active for all hours worked beginning with January 1, 2016. 
  • We urge direct care workers to please address their concerns with their employer (provider) and that provider organizations address any concerns with the appropriate MCPN. 
  • DWMHA leadership continues to have ongoing discussions with MCPN leadership and provider representatives to resolve any issues and answer all questions.
I receive services through a Self-Determination arrangement. Will my budget be increased so I can pay my staff the $1.00 per hour wage increase?

Yes, your self-determination budget will be increased by an amount of money sufficient to pay your eligible direct care workers the $1.00 per hour wage increase plus all statutory employer taxes, FICA, Federal Unemployment Tax, State Unemployment Tax, Workers Compensation, overtime pay and training time.

Is this wage increase based upon merit or work performance?

No, the wage increase is not based upon merit or work performance. All eligible direct care workers should receive the $1.00 per hour wage increase.

What are examples of the direct care worker wage increases?
  • An existing direct care worker earned $8.15 per hour in December 2015; that direct care worker now earns $9.15 per hour in January 2016.
  • An existing direct care worker earned $8.50 per hour in December 2015; that direct care worker now earns $9.50 per hour in January 2016. (However, if that direct care worker received the state-required minimum wage increase of $0.35 from $8.15 to $8.50 per hour during the final pay period of December 2015, and if the pay period included at least 1 day of January 2016, then the DWMHA-required wage increase would be an additional $0.65 increase, bringing the total wage increase to $1.00 per hour and that direct care worker now earns $9.15 per hour.)
What can the Detroit Wayne Mental Health Authority (DWMHA) do to help fix this problem?

The DWMHA recognizes the hard work and dedication that direct care workers provide, therefore in order to retain and recruit the best possible direct care workers to assist the people we serve, DWMHA initiated a network-wide pay increase for eligible direct care workers of $1.00 per hour above the hourly rate they earned in December 2015.

What is included in the funding from DWMHA to the MCPNs and to the providers?
  • MCPNs will receive sufficient additional funds from DWMHA and pass the additional funds through to each provider organization to pay for the $1.00 per hour wage increase to direct care workers. These additional funds will include all appropriate increased costs related to the $1.00 per hour wage increase including taxes, FICA, Federal Unemployment Tax, State Unemployment Tax, Workers Compensation, overtime pay and training time.
  • MCPNs will receive additional administrative funding, at the contract rate of 3.6%, to successfully manage, monitor and verify this process.
What is the current minimum wage in Michigan?

The state minimum wage in 2015 was $8.15 per hour; the new state minimum is $8.50 per hour, effective on January 1, 2016.

What is the minimum wage for Direct Care Workers in Wayne County as of January 1, 2016?
  • The minimum wage for all eligible direct care workers (including those hired after January 1, 2016) will be $9.15 per hour, instead of the new state minimum wage of $8.50 per hour.
  • The $1.00 per hour increase for eligible direct care workers includes the new state minimum wage and is NOT on top of any increases required by the new state minimum wage which was effective on January 1, 2016.
  • Therefore, if a direct care worker received the state-required minimum wage increase of $0.35 from $8.15 to $8.50 per hour during the final pay period of December 2015, and if the pay period included at least 1 day of January 2016, then the DWMHA-required wage increase would be an additional $0.65 increase, bringing the total wage increase to $1.00 per hour.
What should I do if I am an eligible direct care worker but don’t get a $1.00 per hour increase?

We urge you to contact the provider organization that you work for or contact the Managed Care Provider Network (MCPN) that funds your organization and let them know that you did not receive the $1.00 per hour increase.

When will I receive my $1.00 per hour wage increase?
  • The $1.00 per hour increase will be payable for hours worked beginning on January 1, 2016, or for the first pay period beginning on or after January 1, 2016.
  • Given the challenge of implementing this increase, to thousands of workers, it is recognized that the process may take a couple of months for all workers to receive their increase.
  • Eligible direct care workers should receive their wage increase no later than March 31, 2016—however, the increase should be retro-active for all hours worked beginning with January 1, 2016.
Who is eligible for the $1.00 per hour wage increase?
  • Eligible direct care workers are non-professional staff who routinely provide any of the following services: Personal care, community living supports, skill building, supported employment and/or respite services. Certain supervisory staff in licensed homes, who also provide the direct care services listed above, are eligible for the wage increase (for example, workers with titles such as Supervisors, Medical Coordinators, and Home Managers may be included if they routinely provide the services listed above). 
  • Direct care workers who are in a union or are part of a collective bargaining agreement are not required to receive this wage increase. 
  • Direct care workers who work for a DWMHA-network provider at a service site located outside of Wayne County are not required to receive this wage increase for the hours worked outside of Wayne County unless their provider (employer) has agreed to do so. However, these direct care workers are eligible for the wage increase for all the hours they work at service sites in Wayne County.
Will the wage increase be taken away from me in 2017?
  • The DWMHA is committed to continue to provide sufficient funding to the MCPNs to support the $1.00 per hour wage increase, as long as the DWMHA continues to receive sufficient funding from the state.
  • The DWMHA is advocating at the state, via the Section 1009 Work Group and via other venues, to promote additional state funding for direct care worker wages in the future.
More Information for MCPNs and Providers

Details for MCPNs and Providers:

  • MCPNs will receive from DWMHA and pass through to each provider sufficient additional funds to pay for the wage increase to DCWs plus all appropriate, associated, increased costs incurred including taxes, FICA, FUTA, SUTA, Workers Compensation, overtime and training time. 
  • MCPNs will receive additional administrative funding, at the contract rate of 3.6%, to successfully manage, monitor and verify this process. 
  •  MCPNs will collaborate with providers to expedite this process including advancing funds for January, if necessary, to ensure providers have sufficient cash flow for increased payrolls in January.  Please see the email from Stacie Durant, CFO, DWMHA dated December 17, 2015 regarding advances for providers. 
  • The amount paid to each MCPN will be calculated separately by DWMHA, outside of the funding model, but will be included in the monthly funding amount paid to the MCPN by DWMHA. 
  • Each MCPN will independently calculate and negotiate with its providers and increase the amounts paid to their providers to include all appropriate increased wage and tax related obligations. 
  • Direct care workers who are in a union or are part of a collective bargaining agreement are not required to receive this wage increase. 
  • Direct care workers who work for a DWMHA-network provider at a service site located outside of Wayne County are not required to receive this wage increase for the hours worked outside of Wayne County unless their provider (employer) has agreed to do so. However, these direct care workers are eligible for the wage increase for all the hours they work at service sites in Wayne County. 
  • DWMHA currently projects that amounts paid to providers for services rendered for covered codes (H0043, H0045, H2014, H2015, H2016, H2023, S5150, T1005 and T1020) will need to increase by approximately 7.65%, on average, for calendar year 2016 (based on FY15 data). 
  • MCPNs and providers will work collaboratively to insure clarity, transparency and success of the $1 per hour DCW wage increase. 
  •  This is a collaborative, transparent process.  If an MCPN believes it does not have sufficient funds to fully satisfy all of its obligations to the providers please be willing to demonstrate the problem to DWMHA and work with DWMHA to correct. 
  •  If a provider believes it does not have sufficient funds to satisfy its increased payroll obligations please be willing to demonstrate the problem to the MCPN and work with the MCPN to correct.  Either party may request clarity and/or guidance from DWMHA. 
  • DWMHA will not categorically cost settle the DCW increase funded amount as it will become part of services rendered for each MCPN for cost settlement by fund source for fiscal year end. 
  •  DWMHA estimates the total cost for it to fund this pay increase to be about $18 million, network wide, in calendar 2016.  The amount is approximately $13.5 million for the remainder of fiscal year. 
  • The funded amount from DWMHA to the MCPNs is calculated to err on the side of having excess funds available to meet the required increase. 
  • DWMHA is working collaboratively with the MCPNs and Robert Stein, as representative of the provider network, to insure clarity, transparency, effectiveness, timeliness and success. 
  • DWMHA continues to receive feedback, engage on issues and provide updated direction as this process evolves. 

Verification:

  • DCWs are to be made aware of details of this increase and urged to report non-payment issues to the provider and the appropriate MCPN. 
  • The MCPN shall attest that monthly DCW wage increase funds were appropriately sent to providers and that the MCPN received attestation from its providers that those providers received and paid funds to appropriate non-professional direct care workers. 
  • Distribution and use of these funds will be subject to audit, therefore MCPNs and providers are required to maintain appropriate records including proof of before and after wage rates paid. 
  • DWMHA and the MCPNs will monitor progress and DWMHA may make adjustments to funded amounts based on changes in utilization related to its projections. 

Funded Amount Calculation Assumptions:

  • FICA  Employer share of FICA funded at 7.65% on ALL WAGES. 
  • SUTA  SUTA funded at 2.7% on ALL WAGES (no estimate made to cut off for wages over $9,000/year). 
  • FUTA  FUTA funded net of timely payment credit at 0.8% on ALL WAGES (no estimate made to cut off for wages over $7,000/year). 
  • Workers Compensation Insurance at 4%.
  • DWMHA chooses to fund FICA, SUTA and FUTA on ALL WAGES to help account for turnover and part time workers.
  • Current average rate paid to DCWs statewide is $9.52 per independent surveys.
  • Funded amount is based on estimated number of hours and not FTEs.
  • FY15 code utilization is representative of FY16 utilization by MCPN.
  • Funding includes consideration for Overtime Rates applied to 5% of hours.
  • Funding includes consideration for increased cost of non-reportable training of DCW.
  • Above and beyond all the noted assumptions, be aware that funding calculations err on the side overfunding to ensure sufficient funds are available at the MCPN level to provide the wage increase with no added stress to providers.