Olympia nonprofits, franchises fear closure with Prop. 1 minimum wage hike, scheduling rules
Alex Ketter, the co-owner of Olympia Senior Care on the city’s west side, said he first heard about the proposal to raise Olympia’s minimum wage and adopt new worker protections and rules through a signature gatherer while grocery shopping. He was told it was simply a $20-per-hour minimum wage bill.
Ketter said he would be voting in favor of the initiative on the Nov. 4 ballot, if it were so simple. He said he worries there will be unintended consequences for small businesses and franchises from other provisions of the lengthy Workers’ Bill of Rights on the Nov. 4 ballot.
Several business owners spoke during an Oct. 7 public hearing where the Olympia City Council voted to oppose Proposition 1, which would have the city adopt a Workers’ Bill of Rights and raise the minimum wage to $20 per hour.4 The Olympian reached out to a number of those businesses to learn how they might be affected if the initiative passes.
Ketter and his wife employ about 40 caregivers who are certified with the state as either home care aides or certified nursing assistants. Staff help seniors in their homes to maintain independence as long as possible. He said research shows that people survive longer and live better lives if they’re at home instead of a facility.
He said the job runs the gamut from clients who need a couple of hours of assistance a day to folks who need 24/7 care.
“We have everything from somebody just recovering from surgery and they just need a little help because they’re immobile, all the way up to clients who are completely nonverbal, wheelchair bound, like we do some hospice as well,” Ketter said.
Ketter has a number of issues with the Workers’ Bill of Rights, but it comes down to not feeling included in the process. He said it’s unclear how some rules would apply to their business and how those rules would be enforced. And higher pay and stricter scheduling rules might force their clients to pay more for care.
He used an example of a senior being discharged from a skilled nursing facility and needing last-minute care. If they schedule an aide to work last minute, under the new rules, the business would have to pay a last-minute scheduling penalty and the employee may be paid time and a half in some scenarios.
He said the nature of their work is unpredictable. They usually schedule employees to work two four-hour shifts, and those can pop up at any time, depending on the needs of the client. And they can’t just send any employee to work with a client; a good percentage of their clients have dementia and need continued care.
Ketter said most of his employees already make more than $20 per hour. However, if the initiative passes he said pay would go up at least 20%. The rise in payroll expenses, plus scheduling penalty fees, would increase overall costs by 80%, he said.
He said the cost of weekly care could go up to $1,800 for clients.
Ketter said he understands the intent behind the initiative and he sympathizes with the need for predictive scheduling, but it doesn’t work in every industry.
In another scenario, he said a client who was getting 70 hours of care a week passed away. The caregivers assigned to this person were able to be moved to new clients swiftly. Under Prop. 1, he said if he canceled shifts for the client that passed away and added shifts for the new client, he’d have to pay a scheduling fee for each of those caregivers.
“So my alternative is to let my caregivers go without pay for two weeks, or the clients go without care for two weeks. Like that just doesn’t make sense,” he said.
Another concern is that their office may be based in Olympia, but not all their caregivers work in the city. They have clients throughout the region, from Elma in Grays Harbor County to Chehalis in Lewis County.
Ketter said the bill’s requirement that workers receive 10 hours off between shifts doesn’t outline how pay and scheduling would work if a caregiver has one shift in Olympia and another in a different city. He said the only clarification is that the minimum wage provision applies to work performed in the City of Olympia.
“They just didn’t do a good job writing this bill. It’s very confusing. It’s very chaotic. There’s lots of moving parts,” he said. “There’s industries it shouldn’t apply to, or areas where there should be different rules for that industry.”
Very difficult decisions
Ketter said he and his wife will have to make some very difficult decisions if the initiative passes. He said he doesn’t know if they could survive not providing care in the city anymore.
“I don’t know if the market could bear this kind of cost,” Ketter said. “I don’t know if we could just raise costs in Olympia, but keep them lower everywhere else. It gets really difficult.”
He said they may consider moving the business out of Olympia, but they own the building they’re in, so that would be a different financial hit.
Ketter said a lot of their clients have care paid for by the U.S. Department of Veterans Affairs. He said the VA pays a set amount per hour, and they can’t tell them to pay more. He said they would probably have to stop caring for veterans in Olympia, which hurts them personally. His dad was a veteran, and his wife’s grandfather was as well. They’ve been passionate about caring for veterans since they opened the doors.
“The VA isn’t going to change their rates based on the City of Olympia’s local initiative,” he said. “So I don’t know financially if we could make that continue to work.”
Ketter said he also worries about employees suing their employers for violations of the WBOR. He said he wouldn’t be able to afford a lawyer to defend himself. If employees abuse the private right of action, he worries it will bankrupt a lot of small businesses.
“I mean, one or two of those, and most small businesses are done in legal fees, because in that section of the bill, it says that, if the plaintiff wins, they get their attorney’s fees reimbursed, but not the other way around,” he said.
He said most every other minimum wage proposal in Washington has passed so far, and he’s scared that Olympians will blindly vote in favor of the initiative for the minimum wage increase without reading the fine print.
Local nonprofits feeling the pressure
Mindy Roberts, Associate Executive Director at the Olympia Union Gospel Mission, said nonprofit executive directors are anxious about Prop. 1, and they’re afraid to speak out.
“They don’t want to be seen like there’s somebody who doesn’t care about the workers,” she said. “And so people are kind of staying quiet, but we’ve gathered, and they’re all really, really worried.”
She said if the initiative passes, she’s worried downtown Olympia will be boarded up.
Roberts said the mission is funded entirely by donors and doesn’t receive any state or federal funding because it is a Christian organization. She said because of that, they try hard to put the largest portion of every dollar toward the care of people in the community they serve.
The nonprofit serves nearly all ages, starting at 5 years old. Roberts said 85 cents of every dollar they receive goes directly to care.
She said nonprofits often pay lower wages, and so they have a number of perks for their staff. The mission owns a five-plex, a duplex and other housing options for its team, and housing is provided at a low rate. Some are paying $250 a month for a room.
Roberts said there’s no way to pass the cost of higher wages on to those who use their services, either. They’re all free.
“We have a kids club, and that’s free. We have meals that are free, overnight shelter, clothing bank, dental clinic, vision clinic, everything is free,” Roberts said. “So it isn’t like other nonprofits, and that we could just increase the cost for child care or our services, because we don’t charge anything.”
She said if it passes, the initiative will cost the mission about $50,000 in just the first year to keep everyone working the same number of hours they are now. That money isn’t in the budget. She said cuts would have to be made.
“Are we going to need to cut back on shelter nights? Are we going to need to cut back the amount of meals per day we serve?” she said. “I’m not really sure what we’re going to do, but we don’t have it in the budget to have this increase happening.”
Roberts said another factor is the extra pay could push some people to no longer be eligible for benefits like reduced child care and free lunch programs.
She said she thinks the idea of the initiative is great, and she thinks workers’ rights are important. However, she thinks the plan wasn’t fully thought through. She wonders how if someone were to call in sick and needs a replacement, the mission would afford to pay a scheduling penalty and time and a half for that replacement.
“I love the idea and the concept,” Roberts said. “I just think that we need to think it through and give the local businesses and local nonprofits a voice before we put something like this together to go to a vote so that it really can help everybody in the community.”
She said if the initiative passes, it will have major financial effects on local nonprofits including the mission, the Boys and Girls Club, the YMCA and the food bank. That could mean higher fees for those using those programs, or those programs disappearing entirely.
“If it were to pass, we’re going to have to decide what services we’re going to cut and who isn’t going to get care,” Roberts said. “It’s a position that I don’t want to be in, but I’m trying to figure out what to do if that does happen.”
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