Wednesday, May 14, 2014
It occurs to me that what I'm about to write here is a mini-review of a mini-book. Slightly complicating this little task is the fact that I count both authors as friends and mentors.
The latest edition of Elder Law in a Nutshell by Professors Lawrence Frolik (University of Pittsburgh) and Richard Kaplan (University of Illinois) arrived on my desk earlier this month. (As Becky might remind us, both are definitely Elder Law's "rock stars.") And as with fine wine, this book, now its 6th edition, becomes more valuable with age. This is true even though achieving the right balance of simplicity and detail cannot be an easy task for authors in the intentionally brief "Nutshell" series. Presented in the book are introductions to the following core topics:
- Ethical Considerations in Dealing with Older Clients
- Health Care Decision Making
- Medicare and Medigap
- Long-Term Care Insurance
- Nursing Homes, Board and Care Homes, and Assisted Living Facilities
- Housing Alternatives & Options (including Reverse Mortgages)
- Alternatives to Guardianship (including Powers of Attorneys, Joint Accounts and Revocable Trusts)
- Social Security Benefits
- Supplemental Security Income
- Veterans' Benefits
- Pension Plans
- Age Discrimination in Employment
- Elder Abuse and Neglect
The authors describe their anticipated audience, including "lawyers and law students needing an overview of some particular subject, social workers, certain medical personnel, gerontologists, retirement planners and the like." Curiously, they don't mention potential clients, including family members of older persons. I suspect the book can and does assist prospective clients in thinking about when and why an "elder law specialist" would be an appropriate choice for consultation. This book is a very good starting place.
What's missing from the overview? Not a lot, although I find it interesting that despite solid coverage of the basics of Medicaid, and even though it is unrealistic to expect exhaustive coverage in a mini-book, the authors do not hint at the bread and butter of many elder law specialists, i.e., Medicaid Planning. Thus, there's little mention of some of the more cutting edge (and therefore potentially controversial) planning techniques used to create Medicaid eligibility for an individual's long-term care while also preserving assets that otherwise would have to be spent down.
Modern approaches, depending on the state, may range from the simple, such as permitted use of assets to purchase a better replacement auto, to more complex planning, as in states that permit purchase of spousal annuities or use of promissory notes, allow modest half-a-loaf gifting, or recognize spousal refusal. Even though the federal Deficit Reduction Act of 2005 succeeded in restricting assets transfers to non-spouse family members, families, especially if there is a community spouse, may still have viable options. Without appropriate planning the community spouse, particularly a younger spouse, may be in a tough spot if forced to spend down to the "maximum" permitted to be retained, currently less than $120,000 (in, for example, Pennsylvania). See, for example, a thoughtful discussion of planning options, written by Elder Law practitioners Julian Gray and Frank Petrich.
Perhaps the Nutshell omission is a reflection of the unease some who teach Elder Law may feel about the public impact of private Medicaid planning?
May 14, 2014 in Advance Directives/End-of-Life, Books, Cognitive Impairment, Dementia/Alzheimer’s, Discrimination, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Medicaid, Medicare, Property Management, Social Security | Permalink | Comments (0) | TrackBack (0)
Friday, May 9, 2014
The April 2014 issue of the American Bar Association's Bifocal publication is now available. Current articles include:
- Will Your Health Care Advance Directive Be There When You Need It?
- A Guardian's Health Care Decision-Making Authority: Statutory Restrictions
- Palm Beach Guardianship Monitoring Program Offers Innovative Model
- Attorneys Representing Veterans: Opportunities and Challenges
- Don't Let Congress Go Another Year Without Funding the Elder Justice Act
By the way, while most Bifocal articles are written by practicing attorneys, American Univesity Washington College of Law student, Karna Sandler, is the author of the article on how state laws may affect a guardian's health care authority. Karna's an intern at the Commission on Law and Aging. Way to go, Karna!
In addtion, the issue provides details about AARP Foundation Scholarships to assist individuals in attending the 2014 National Aging and Law Conference to be held in Washington D.C. on October 16-17. Deadline for the scholarship applications is June 15, 2014.
Thursday, May 8, 2014
Via the Alzheimer's Association:
Congress unanimously passed the bipartisan National Alzheimer’s Project Act (P.L. 111-375) in 2010. The law instructs the Department of Health and Human Services (HHS) to develop a strategic plan to address the rapidly escalating Alzheimer’s disease crisis. The annually updated National Alzheimer’s Plan must be transmitted to Congress each year and is to include outcome-driven objectives, recommendations for priority actions and coordination of all federally funded programs in Alzheimer’s disease research, care and services. The plan also includes the goal of effectively treating and preventing Alzheimer’s by 2025.
The one missing piece in this plan is a projection of the level of funding necessary to reach the critical goal of effectively treating and preventing Alzheimer’s by 2025. The Alzheimer’s Accountability Act represents a bipartisan effort to ensure that Congress is equipped with the best possible information to set funding priorities and reach the goal of the National Plan to Address Alzheimer’s Disease - effectively preventing and treating Alzheimer’s by 2025.
Friday, May 2, 2014
Congressmen Earl Blumenauer (OR-03) and Chris Smith (NJ-04) introduced HR 4543, the PACE Pilot Act, a bipartisan and budget neutral bill that would allow The Program of All-Inclusive Care for the Elderly (PACE) programs greater flexibilities to expand their successful model to care for people under age 55 who have special health risks.
PACE integrates Medicare and Medicaid benefits for members of our society who have some of the most serious and costly health care problems. The program seeks to keep people living in the community rather than in long-term care institutions. Currently, PACE is only available to individuals age 55 or older and who are certified by their state as being eligible for a nursing home level of care. Expansion of these programs will offer younger individuals with disabilities this same integrated, community-based option that supports their independence and quality of life.
“PACE has been a huge success,” said Blumenauer. “What we have realized is that there is a group of people out there who currently don’t qualify for PACE because of the age requirement, but would otherwise greatly benefit from the program due to serious medical conditions. This bill allows us to see how we can bring them into the fold efficiently and affordably.”
“PACE continues to provide patient centric care to many of the frailest members in our society, while enabling them to live in their homes and stay in their communities,” said Smith. “We know that all PACE participants are eligible for nursing home care, yet 90 percent continue to live at home. By removing the nursing home level of care requirement, we can help ensure that people have greater access to preventative services and treatments, thereby helping them maintain their quality of life.”
Currently, a total of 103 PACE sites in 31 states serve about 56,000 enrollees nationwide. A number of research studies show that beneficiaries enrolled in PACE had fewer hospitalizations and nursing home admissions, and lower mortality than similar beneficiaries who were not enrolled in PACE.
Monday, April 28, 2014
National Senior Citizens Law Center's Executive Director Kevin Prindiville analyzes Paul Ryan's Congressional budget numbers for the Huffington Post, highlighting the effect of proposed deep cuts on federal aid programs, cuts that would dramatically impact the nation's poorest seniors. Kevin writes:
"The U.S. House of Representatives' recent approval of the Ryan budget resolution threatens programs that help poor seniors. In a disappointing vote, 219 House members gave their blessing to a budget that leaves country's older adults to struggle with less food, income, housing and care. The Ryan budget's path to poverty must not be allowed to happen. . . . By cutting essential programs that often make life manageable for those with limited means or resources, the Ryan budget will lead to poverty numbers among seniors the nation hasn't seen since the Depression."
Kevin then outlines specific terms of the House plan to cut $5 billion from SSI, $732 billion from Medicaid, as well as additional cuts to Meals on Wheels and food benefit programs.
The NSCLC, a nonprofit law firm with offices on both sides of the country, is a watchdog for the nation's low income elderly, succeeding with tough-to-win cases where the nation's most at-risk seniors are adversely affected by often-hidden changes or procedural traps in Social Security, Medicare and Medicaid programs. Additional information on NCSLC's advocacy is available on their website, along with a calendar of events including the April 29 free webinar on "Understanding and Impacting Implementation of New Medicaid Home and Community-Based Services Rules."
Friday, April 18, 2014
Three legal advocacy organizations, Disability Rights Oregon, the Oregon Law Center and the National Senior Citizens Law Center, worked as a team to initiate a class action suit in Oregon on behalf of 700 individuals with disabilities to protect their rights to continue to receive Social Security benefits needed for basic living requirements. The individuals' access to monthly Social Security benefits was jeopardized when a non-profit organization, "Safety Net of Oregon," serving as their representative payee was disqualified following an investigation for alleged mismanagement of clients' funds. The advocates explained:
"This suit is asking that SSA follow its own regulations to make sure that benefits continue to flow to recipients in a safe and responsible manner. In early March, SSA sent a notice to approximately 1,000 SSA recipients who have Safety Net as a representative payee, advising them that their benefits would be suspended beginning April 1, 2014, and that the amount they would receive would be $0.00. While some recipients have been able to find a new payee, or to become their own payee, many clients never received the notice and have no idea that their benefits are about to be suspended. Almost 700 individuals still lack new payees as of March 21, 2014. Many are homeless, have severe and persistent mental illness, developmental disabilities, and/or alcohol or drug addictions. Many of the clients are profoundly social isolated and alienated, and totally unable to navigate the system on their own."
In response to the suit, the federal court issued a restraining order on March 26 requiring SSA to assign new payees to former Safety Net Clients, rather than delay, require new applications or other in-person requests by the disabled SSI and SSD recipients. More background here.
Tuesday, April 15, 2014
The Social Security Administration announced on Monday that it is halting its practice of "Treasury Offsets" to recover debts reported to be 10 years or older. This decision comes just three days after the Washington Post's front page account of intercepts that targeted IRS income tax refunds going to children of alleged debtors. As reported in today's Washington Post:
“"I have directed an immediate halt to further referrals under the Treasury Offset Program to recover debts owed to the agency that are 10 years old and older pending a thorough review of our responsibility and discretion under the current law,' the acting Social Security commissioner, Carolyn Colvin, said in a statement.
Colvin said anyone who has received Social Security or Supplemental Security Income benefits and 'believes they have been incorrectly assessed with an overpayment' should contact the agency and 'seek options to resolve the overpayment.'”
The Washington Post reported that after its first article, "many hundreds of taxpayers whose refunds had been intercepted came forward and complained to members of Congress that they had been given no notice of the debts and that the government had not explained why they were being held responsible for debts that their deceased parents may have incurred."
Hmm. It seems that it is the intercept notice procedures that may be the focus of reexamination by the SSA, rather than giving up on the authority granted by Congress in 2008 to recover "stale" debts. Plus, it is unclear whether SSA will explain its theory for seeking recoveries against children of debtors.
Wednesday, April 2, 2014
University of Oklahoma Professor of Law Jonathan Barry Foreman writes on "Supporting the Oldest Old: The Role of Social Insurance, Pensions, and Financial Products," for the Elder Law Journal in 2014.
He points to "longevity risk," defined as the risk of outliving one's retirement savings, as "probably the greatest risk facing current and future retirees" in the U.S. As several recent studies demonstrate, such as those cited on the Elder Law Prof Blog here, here and here, many people are not adequately prepared in terms of finances for retirement.
In responding to this risk, Professor Foreman writes thoughtfully, proposing systemic alternatives, including expansion of Social Security and SSI for "the oldest old." Professor Foreman suggests 90 years of age as the starting point for that category. In addition he proposes greater incentives for public and private employers to promote annuities and other "lifetime income products" as components of employment-based retirement packages.
He concludes with a warning based on our national history of frequently failing to make significant changes in advance of a predictable crisis:
"Social insurance programs like Social Security, Supplemental Security Income, and Medicaid will certainly need to be expanded. Workers will also need to be encouraged to work longer and save more for their eventual retirements, and both workers and retirees should be encouraged to annuitize more of their retirement savings.
While these kinds of solutions seem fairly predictable, the answers to two important policy questions have yet to be decided. First, how much will the government require the oldest old to save earlier in their lives? And second, how much will the government redistribute to benefit the oldest old? Unfortunately, if the history of the Social Security system is any indication, both government mandates and redistribution will be modest, and a significant portion of the oldest old will face their final years with inadequate economic resources."
Reading Professor Foreman's tightly focused paper suggests to me that there is, perhaps, a certain irony to all of this. The irony is that by not embracing systemic change, Americans are engaging in a form of financial roulette, betting we won't live long enough to care about the outcome of our gamble.
Monday, March 31, 2014
A few weeks ago, I posted the account of one family's struggle to find competent care for aging parents. Eventually they were referred to a team of two women who did provide good care, but who insisted on being paid in cash. I later learned that one person expected an additional "fee" for "managing" the arrangement. The family felt trapped, although the crisis was cut short when the parent died.
More recently, I read another family's story, where a non-family member provided proper senior care in exchange for "cash," and this time the arrangement lasted for several years. Eventually, however, the cared-for-individual's savings were exhausted, and her increasing health needs meant a nursing home was inevitable. But how to apply for Medicaid? Any review of bank records that accompanies a Medicaid application would show large, regular cash withdrawals from the elder's accounts, totaling more than two hundred thousand dollars. With no W-2s or other documentation of the use of that cash, would the state agency treat the transactions as gifts creating ineligibility for Medicaid? Would an affidavit or testimony by a family member be enough to satisfy the agency?
A group of experienced attorneys brainstormed the options in this fact pattern and raised a host of additional practical questions, including why the family had not sought help from an attorney or accountant at the outset of the arrangement. I suspect part of the answer was the family was operating in "survival" mode -- trying to solve a crisis with temporary help -- and failing to realize the potential for it to become long-term. In the meantime, their loved one bonded with the individual caregiver who either would not or could not be paid on the books. One lawyer observed that this fact pattern demonstrates why "Elder Law" needs better visibility and understanding by the public, as elder law attorneys can help prevent this legal nightmare from occurring.
During the brainstorming, someone provided a useful link to "Risks of Hiring Caregivers Under the Table: Why It Can Be Dangerous...." by Melanie Haiken from Caring.com.
For more detailed guidance, IRS Publication 926, the Household Employer's Tax Guide, is remarkably straight forward, if still probably intimidating for the average person.
Saturday, March 29, 2014
The Department of Labor recently posted a Final Rule that changes how the Fair Labor Standards Act is interpreted for domestic service. Of special interest is how the Rule impacts shared living programs under Medicaid.
The Department of Labor has also created guidance to assist stakeholders in determining whether an entity paying a direct care worker through a shared living arrangement is required to comply with the FLSA’s minimum wage and overtime requirements. The guidance also describes how certain FLSA principles apply to shared living arrangements.
These changes become effective January 1, 2015.
Thursday, March 20, 2014
Nursing Home Admissions Agreements: A Discussion of the Unfair Terms in the Agreements Presented to Elders on Entering a Nursing Hom
Join the National Consumer Law Center for a Webinar on April 2
Space is limited.
Reserve your Webinar seat now here.
Elders often enter nursing homes during some of the most trying times of their lives (emotionally and financially). Unfortunately, many nursing homes take advantage of these vulnerabilities by inserting unfair terms in their admissions agreements or convincing family members or others to assent to such agreements even though they often lack the authority to do so. Our webinar will focus on nursing home admissions agreements, identifying the terms that elders and their advocates should be most wary of and explaining the protections that some states afford against enforcement of some of these terms. Though the webinar will cover a range of issues, we will focus on arbitration clauses, attempts to hold family members liable for a resident’s bills, purported waivers of a facility’s liability, and improper grounds for eviction.
Presenters: Eric Carlson, Directing Attorney, National Senior Citizens Law Center and David H. Seligman, Irving Kaufman Fellow, National Consumer Law Center.
Additional sponsorship for this Webinar is provided by a grant from the Administration on Aging/Administration for Community Living . This webinar is part of a series of National Elder Rights Training Project webinars for the National Legal Resource Center.
There is no charge for this webinar.
All time listings are in Eastern Standard Time.
If you have any questions email firstname.lastname@example.org
Title: Nursing Home Admissions Agreements: A Discussion of the Unfair Terms in the Agreements Presented to Elders
Date: Wednesday, April 2, 2014
Time: 2:00 PM - 3:30 PM EDT
After registering you will receive a confirmation email containing information about joining the Webinar.
Tuesday, March 18, 2014
Professor Donna Harkness: "What Are Families For? Re-evaluating Return to Filial Responsibility Laws"
Donna Harkness, clinical professor of law and director of the Elder Law Clinic at the University of Memphis Cecil C. Humphries School of Law, has a new article on filial support laws in the most recent issue of the University of Illinois's Elder Law Journal. In "What Are Families For? Re-valuating Return to Filial Responsibilities Laws," she concludes:
"Despite their long history, filial responsibility laws have clearly failed to remedy existing needs. The lack of uniformity in filial responsibility laws, the difficulty and cost of enforcement, along with the fact that such laws provide no coverage to those elder Americans that have no adult children to look to for support, render them a limited response at best. In addition, to the extent that filial responsibility laws are enforced, evidence indicates they would be destructive to family ties and have the counterproductive effect of further eroding and destabilizing the network of support available to elders.
Furthermore, by focusing solely on economic support, filial responsibility laws do not address the fundamental need that all persons, and most especially the vulnerable elderly, have to be supported by caring relationships. To the extent that the institution of the family, however defined, is the key to ensuring that such relationships exist, it behooves us as a society to strengthen and foster family ties through policy initiatives that reward caring relationships."
Find out more about this settlement agreement here.
Monday, March 17, 2014
From 3L student Katie L. Summers at my own law school, Penn State Dickinson, a recently published Penn State Law Review comment titled "Medicaid Estate Recovery: To Expand, or Not to Expand, That is the Question." Here is a taste, from the abstract:
"To recoup some of the costs of Medicaid, the states are required to implement a Medicaid estate recovery program. There are certain mandated requirements, but the reach of the recovery program is primarily left to the discretion of the states. Pennsylvania recently contemplated expanding its Medicaid estate recovery program, but the proposed changes were not enacted. This Comment provides an overview of Medicaid estate recovery in Pennsylvania by exploring the background of Medicaid, Medicaid estate planning, and Medicaid estate recovery generally. In addition, this Comment examines the arguments for and against Medicaid estate recovery. Finally, this Comment recommends the creation of a system that expands Medicaid estate recovery in Pennsylvania, while retaining certain protections for the deceased Medicaid recipient’s heirs."
Thursday, March 13, 2014
Via Disability Scoop:
Under a new bill proposed in the U.S. Senate, the amount of money that Supplemental Security Income recipients could save without losing access to their benefits would rise for the first time in over two decades. Currently, individuals who receive SSI can have no more than $2,000 in cash or liquid assets at any given time without forfeiting their eligibility for benefits. The legislation, introduced late last week, calls for that asset limit to increase to $10,000. The bill would also eliminate restrictions that currently disallow friends and family from providing financial, food and housing support to those receiving SSI and the measure would boost the amount of income beneficiaries could earn without losing out on benefits.
“SSI is a critical program that helps millions of our poorest and most vulnerable citizens keep their heads above water,” said U.S. Sen. Elizabeth Warren, D-Mass., who proposed the bill along with Sen. Sherrod Brown, D-Ohio. Warren said the legislation would “help strengthen SSI for families who rely on these essential benefits.” More than 8 million Americans — including many with disabilities — draw on SSI. Currently, the maximum federal benefit for an individual receiving SSI is $721 per month, though many states tack on additional funding for their residents meaning that actual payments can be somewhat higher. The last time the asset cap for SSI recipients was increased was in 1989, the senators said.
Read the legislation: Supplemental Security Income Restoration Act of 2014
Thursday, February 20, 2014
In a previous post, I reported on a senior care whistleblower case, where a court ruled that a former corporate officer, who was also the in-house counsel, cannot participate in a False Claims Act suit, if the information supporting the claim comes from privileged communications received in his role as an attorney. The two other former executives of the company, non-lawyers, could have participated as qui tam plaintiffs; however the entire case was dismissed by the court as a sanction for improper disclosure of attorney-client privileged information.
Most whistleblowers are insiders, either current or former employees; however, that is not always true. The "relator" (that's False-Claim-Act-speak for whistleblower) in a suit brought against RehabCare, Rehab Systems, and Health Systems, Inc. was the CEO of a competitor, Health Dimensions Rehabilitation, Inc., who first heard about a successful use of "referral fees" during a public conference call hosted by RehabCare.
"Pride goeth before a fall," as our mothers might say. In this case, the CEO's research into the referral fees resulted in allegations the fees were intended to generate referrals of clients covered by Medicare and Medicaid, thus giving rise to alleged violations of the federal Anti-Kickback Act. The defendants denied all allegations.
In the RehabCare case, which settled earlier this year for a reported $30 million, the whistleblower, Health Dimensions Rehabilitation, Inc. is in line to receive about $5.7 million from the settlement, according to the U.S. Justice Department.
Penn State Dickinson School of Law is hosting a half-day program examining "Whistleblower Laws in the 21st Century," on March 20, 2014. Speakers include both academic scholars and experienced attorneys who have advised or represented parties in False Claims Act cases in health care, including "senior care."
Tuesday, February 18, 2014
The National Council on Aging identifies five ways that Congress -- if it could get its act together -- can help seniors in 2014:
- Restore funding and modernize aging services, beginning with revitalization of the Older Americans Act, once the central legislation for a national approach to basic safeguards;
- Protect low-income Medicare beneficiaries, by securing the viability of the Medicare Qualified Individual (QI) program, aimed at helping low income individuals (those with incomes between $13,700 and $15,300) take part in Medicare Part B, key to insurance coverage for doctor's visits.
- Renew the Farm Bill, including the Supplemental Nutritional Assistance Program (SNAP) to help needy seniors obtain healthy food, a program that in the past has been important to as many as 4 million older adults, as well as younger persons facing food insecurity.
- Introduce long-term care legislation -- that focuses on the very real needs for daily assistance (long term "services and supports") , beyond "mere" health care.
- Pass immigration reform -- necessary to provide the work force to cope with the predicted needs for care and assistance to aging boomers.
Monday, February 17, 2014
Via the ABA Journal:
Asking would-be lawyers standard questions about their mental health, including their history of diagnosis and treatment, could violate the Americans with Disabilities Act, according to the civil rights division of the U.S. Department of Justice. In a lengthy Feb. 5 letter (PDF) to the Louisiana Supreme Court, its committee on bar admissions and the state attorney disciplinary board that is likely to reverberate throughout the country, the division says some, but not all, of the questions asked in a standard National Conference of Bar Examiners questionnaire are unduly broad and violate the ADA. The DOJ also found that the state violates the ADA in evaluating bar applications from individuals with a history of mental health issues and admitting them to practice conditionally.
Thursday, February 13, 2014
Via Kaiser Health News and sources referenced therein:
After years of trying, Rep. Joe Courtney, D-Conn., says he is optimistic that Congress will change the Medicare policy that has left thousands of patients without coverage for nursing home care after leaving the hospital.
The CT Mirror: After years of trying, U.S. Rep. Joe Courtney, D-2nd District, said Tuesday he’s optimistic that Congress will take action to address a technicality that has left thousands of Medicare patients without coverage for nursing home care after leaving the hospital. At issue is how Medicare treats patients designated by hospitals as being on “observation status.” Medicare’s hospitalization benefit covers nursing home care for patients recovering from a hospital stay, if they have spent at least three consecutive days as inpatients in a hospital. But increasingly, hospitals have been designating patients as being on observation status, even if they receive inpatient care and spend several nights in the hospital (Becker, 2/11).
CQ HealthBeat: As Rep. Joe Courtney, D-Conn., sees it, more of his colleagues are becoming aware of the ill effects that can occur when hospitals tell Medicare that a person who spent days being treated within their walls was not an “inpatient.” Courtney and many advocacy groups say that when hospitals instead slot patients as receiving “observation” services, that can deprive them of needed follow-up skilled nursing care. Or, it can cost them dearly if they use these services as after a hospital stay (Young, 2/11).
For lots of great information on the observation status issue, visit the Center for Medicare Advocacy's observation status resource area.
Wednesday, February 12, 2014
President will sign Executive Order raising minimum wage for government contracts--including for those with disabilities
FACT SHEET - Opportunity For All: Rewarding Hard Work
Raising the Minimum Wage through Executive Order to $10.10 for Federal Contract Workers
& Calling on Congress to Finish the Job for All Workers by Passing the Harkin-Miller Bill
Today, continuing to fulfill his promise to make 2014 a year of action, the President will sign an Executive Order to raise the minimum wage to $10.10 for federal contract workers.
The Executive Order the President will sign today will benefit hundreds of thousands of people working under contracts with the federal government who are making less than $10.10 an hour. It will also improve the value that taxpayers are getting from the federal government’s investment. Studies show that boosting low wages will reduce turnover and absenteeism, while also boosting morale and improving the incentives for workers, leading to higher productivity overall. These gains improve the quality and efficiency of services provided to the government.
In his State of the Union Address, President Obama pledged to both take executive action wherever he can and work with Congress to increase opportunity for all Americans. Consistent with that pledge, the President will continue to work with Congress to finish the job to raise the minimum wage for all Americans and pass the Harkin-Miller bill so that all workers can be paid at least a $10.10 minimum wage.
Details of the Executive Order
Ø The Executive Order will raise the minimum wage to $10.10 effective for new contracts beginning January 1, 2015. The higher wage will apply to new contracts and replacements for expiring contracts. Boosting wages will lower turnover and absenteeism, and increase morale and productivity overall. Raising wages for those at the bottom will improve the quality and efficiency of services provided to the government.
Ø Benefits hundreds of thousands of hardworking Americans. There are hundreds of thousands of people working under contracts with the federal government to provide services or construction who are currently making less than $10.10 an hour. Some examples of the hardworking people who would see their wages go up under this Executive Order include nursing assistants providing care to our veterans at nursing homes, concessions workers in National Parks, people serving food to our troops, and individuals with disabilities working to maintain the grounds on military bases.
Ø Includes an increase in the tipped minimum wage. This executive order also includes provisions to make sure that tipped workers earn at least $10.10 overall, through a combination of tips and an employer contribution. Employers are currently required to pay a minimum base wage of $2.13 per hour, a base that has remained unchanged for over twenty years, and if a worker’s tips do not add up to the minimum wage, the employer must make up the difference. Under the Executive Order, employers are required to ensure that tipped workers earn at least $10.10 an hour. The Executive Order requires that employers pay a minimum base wage of $4.90 for new contracts and replacements for expiring contracts put out for bid after January 1, 2015. That amount increases by 95 cents per year until it reaches 70 percent of the regular minimum wage, and if a worker’s tips do not add up to at least $10.10, the employer will be required to pay the difference.
Ø Covers individuals with disabilities. Under current law, workers whose productivity is affected because of their disabilities may be paid less than the wage paid to others doing the same job under certain specialized certificate programs. Under this Executive Order, all individuals working under service or concessions contracts with the federal government will be covered by the same $10.10 per hour minimum wage protections.
Ø Improves value for the federal government and taxpayers. One study showed that when Maryland passed its living wage law for companies contracting with the state, there was an increase in the number of contractors bidding and higher competition can help ensure better quality. The increase will take effect for new contracts and replacements for expiring contracts put out for bid after the effective date of the order, so contractors will have time to prepare and price their bids accordingly.