The U.S. Department of Labor’s regulations that increased minimum wage and overtime coverage to home health workers have resulted in the Arkansas Support Network Inc. owing $650,000 in back wages to employees who worked overnight shifts in clients’ homes.
And that’s not the only wage-related issue facing the Springdale nonprofit, which has contracts with the Arkansas Department of Human Services to provide support and counseling for about 1,700 people with developmental disabilities.
A current and a former employee filed a lawsuit in December against ASN alleging they are owed back wages for unpaid overtime and are being paid below the minimum wage. The suit in U.S. District Court in Fayetteville is seeking class-action status.
Keith Vire, who retired from ASN as chief executive officer at the end of 2017, told Arkansas Business last month that he couldn’t comment on the lawsuit, but wasn’t surprised by it. (Syard Evans replaced Vire as CEO.)
“Honestly, I don’t really blame employees,” Vire said. “They got the shaft.”
Vire said a Labor Department audit determined ASN owed $650,000 in back wages to nearly 300 workers.
But the audit could have been avoided if DHS had increased its funding to ASN when he asked for it at the end of 2015, he said.
Vire said that when he learned that starting Jan. 1, 2016, companionship services would no longer be exempt from the Fair Labor Standards Act, he requested an increase of about $300,000 from DHS, which contracted with ASN to provide the companion services.
But DHS denied the request for nearly four months, he said. “There was nothing we could do,” Vire said. “We get what we get, and that’s all we get.”
DHS spokeswoman Amy Webb said in an email to Arkansas Business that her department has worked “extensively” with Vire and ASN on the wage issue and “approved increases in funding for some clients.”
After the Department of Labor released its new regulations, DHS’ Division of Developmental Disabilities and Division of Medical Services “worked together to secure changes to our waiver program, such as changing the restriction on providers using waiver funding to pay overtime and allowing family members to work more than 40 hours per week,” she said.
ASN submitted about 80 plan increases, and DDS approved increases on a case-by-case basis, Webb said.
In 2015, ASN paid its employees $65 to $75 for a 12-hour overnight companion shift.
Even though the pay fell below the minimum wage of $7.25 per hour, companionship services at that time were exempt from the Fair Labor Standards Act’s minimum wage and overtime pay requirements, he said.
“When established in 1974, such exemptions were meant to apply to casual babysitters and companions for the elderly and infirm — not workers who chose in-home care service as a vocation and were responsible for supporting their families,” according to a news release from the Department of Labor.
The National Association for Home Care & Hospice of Washington and other groups filed a federal lawsuit in 2014 to block the DOL’s regulations, which were initially set to go into effect in January 2015.
The U.S. District Court for the District of Columbia in December 2014 issued a temporary restraining order stopping the Labor Department from enforcing the new regulations.
A federal appeals court, however, ruled in August 2015 that the regulations could be enforced.
Vire said companionship positions were sought-after jobs, prized by college students and others. “You had no duties except just to be there in case something happened,” Vire said.
In the lawsuit, a former employee, Shay Ferguson of Washington County, had a different view of his job duties. He said in the lawsuit that he was required to stay alert throughout the evening and could not sleep during the shift. “Arkansas Support Network required Ferguson and other direct support professionals to remain alert because their charges might attempt to leave the residence during the night and could be a risk to themselves or others,” the lawsuit said.
Founded in 1988, ASN has a budget of about $30 million, but it didn’t have the money to pay the employees’ back wages immediately, Vire said.
The DOL developed a payment plan that goes through 2020. Vire said ASN has paid about $140,000 in back wages to employees.