Impact to RCOC on State Minimum Wage Increase and Federal Overtime Changes

Yesterday, Governor Jerry Brown signed into law a bill that will raise California’s minimum wage to $10 an hour by 2016.

The wage hike will go into effect in two phases.  The current minimum of $8 an hour will be increased to $9 on July 1, 2014, and then to $10 on January 1, 2016.  It is the first increase since January 1, 2008, when the country’s economy was declining into the Great Recession.

Concerns have been expressed across our community regarding the impact that this will have on RCOC’s providers and the people we serve.  We have received the following information from the Department of Developmental Services (DDS) regarding the implementation of this new law and the US Department of Labor overtime changes:

1.       In the past, when there was a minimum wage increase, DDS has increased rates for certain service providers.  When the California minimum wage was increased in January 2007 and January 2008, regional center allocations were increased $26.3 million in FY 2006-07 and $45.0 million in FY 2007-08.  Increases went to Level 2 and Level 3 community care facilities, day programs, habilitation services, supported living services, and respite services.

2.       Overtime Changes – DDS listed this as a “Future Fiscal Issue” in the May Revision.  They estimated that it would cost the regional centers about $21 million more in POS.

RCOC will be working closely with the Vendor Advisory Committee and will keep you updated as we receive more information.