Don’t forget that each GoodLife U episode builds on the last; to get the most out of this episode, you really need to go back and watch Episodes 1 – 4, where we covered the DSP Staffing Crisis, the Problem with Wonky Schedules, our Five Faucet Theory, and Filling the Vacancy Gap. Today’s episode is all about Premium Pay–buckle your seat belts. This approach is very unique, but has been extensively vetted and (when combined with our Front/Back work schedules) offer several advantages.
We almost named this episode, “Consult with your Attorney“–but it didn’t have the right ring to it. Kidding aside, there are some complexities to Premium Pay that are important to deeply understand before launching. According to the Fair Labor Standards Act, 29CFR §778.203, Premium Pay can be used for Saturdays, Sundays, and other special days.
This law uniquely helps us accomplish a couple of things. Remember, we are looking for schedules and labor strategies that are predictable and affordable for providers. We also want to leverage capacity and increase wages for DSPs, which ultimately improves the quality and stability of care. When we accomplish this it truly makes a meaningful difference in the lives of the individuals served.
So how does Premium Pay work? Unlike a differential (that impacts your base wage, and therefore adjusts your overtime costs), Premium Pay allows an agency to elect to pay at least time-and-a-half for shifts worked on Saturdays, Sundays, or special days, even when the employee has not worked more than 40 hours in that workweek.
But now you’re probably asking, “Why would you choose to pay overtime wages before overtime is earned?” This is a great question. Here’s why GoodLife utilizes Premium Pay:
- It allows us complete control in managing and budgeting for our overtime costs. We’ve eliminated almost all of the “bad” or “unbudgeted” overtime here. Some agencies spend an additional 15-25% on overtime costs. At GoodLife, even when the demand for this workforce is at its most extreme and we are asking for DSPs to work extra, our unbudgeted overtime hovers around only 2%.
- It allows us to achieve our target wage for this incredibly dedicated DSP workforce. In fact, we’ve been able to increase the average hourly rate for our DSPs by more than $1.20/hr in most cases. All without adversely affecting the base-wage, which also reduces the real costs of that “bad” overtime.
- When a special day is worked, it serves as a credit for overtime worked that week, essentially enabling DSPs to pick up additional shifts and improve capacity without it costing the agency excessive overtime.
Ultimately, since Premium Pay is included in GoodLife’s system, we are empowered to plan accordingly. This enables us to meet expectations and budgets, improve wages, and it increases our overall capacity for DSPs to work extra (which we need now more than ever). It’s a win-win-win.
Premium Pay has been utilized here at GoodLife for many years, and would be happy to work with you to fully understand and even implement these changes. If you are interested in learning more about Premium Pay, let us help. The GoodLife U team can analyze the impact these approaches could have for your organization specifically (that might look like this), and can walk you through the process. Please contact Megan Todd to set up a personalized meet and greet with our team–we would love to partner with you.
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