Living Wage Legislation

Long Island Business News
July 20, 2001

On July 27, the Suffolk County Legislature will vote on whether to override County Executive Robert Gaffney's veto on a living wage bill. The bill, which passed 17-1, would require all agencies doing contract work with the county to pay a minimum of $9 per hour to employees who receive health benefits, $10.25 without.

Among those affected would include home health care agencies that work through Medicaid programs, child-care agencies, mental health providers and transportation agencies, including school bus companies.

Roni Glaser, an attorney with Meltzer, Lippe, Goldstein & Schlissel, has several home-health care agencies as clients, and though she said most support the idea of paying living wages, she sees several problems with the legislation.

First, the agencies, whose rates for Medicaid funding are set by the state, must incur costs for two years before they can apply for additional reimbursement, and even then there is no guarantee they will get it. She put the impact on home health care providers in Suffolk County at $7 million dollars per year. "The legislators really haven't thought through who's going to pay for these mandated increases ," she said.

Legis. David Bishop, D-Lindenhurst, the bill's sponsor, said state and federal representatives have assured him that money will be available to cover the mandated increase, and that if necessary, the county will bridge the gap. "Our first priority has to be scrapping the current system, which keeps people who work full-time in poverty," he said, adding that the amount is small compared to the $2 billion state surplus and hundreds of billions in federal surpluses.

He pointed out that not-for-profit agencies are exempt for one year if the impact is more than 10 percent of their budget and their highest-paid employee earns less than six times the lowest-paid. However, Glaser said, even the for-profit firms she represents don't operate on the kind of margins to absorb this kind of increase.

Another problem, she said, is that because the law demands Medicaid be billed the lowest rate available, the agencies will have to raise their rates for everyone, including those who pay for it themselves, who in some cases can barely afford it as it is. It would be impossible in practical terms to pay employees more for county-related work than for privately paid work, she added.

Also, the bill as written requires every contractor to file a quarterly list of all employees, their addresses, salaries, and other information. "This is inconsistent with the Freedom of Information Law, which keeps such information confidential," she said. A similar requirement in another county was disapproved by the State Department of Health, she said.

Bishop compared protests over his proposed law to those raised when the federal minimum wage was instituted, or whenever it is raised. "Teenagers at McDonald's now make more than most home healthcare workers," he said. "Is that right? Is that moral?"