Work backwards from a published rate to the most you can actually pay someone, or
forwards from a wage to what the line costs the budget. Employer burden sits between the two, and
DDS publishes an approved burden figure for every FMS and every employer model.
For any staffing service, the published rate has to cover the wage and the employer
burden
This is the single most expensive misunderstanding in Self-Determination. A regional center
publishes a rate of, say, $37.95 an hour for Personal Assistance, a family hears “thirty
seven ninety five an hour” and offers that to a caregiver. It cannot be done. That rate is
the whole cost of the hour, and out of it the employer still owes Social Security, Medicare,
federal and state unemployment, the employment training tax, paid sick leave, and workers’
compensation.
Base rate×(1 + employer burden)=priced unitPriced unit×annual units=total annual cost
So the maximum wage is the rate divided by one plus the burden, not the rate minus a
percentage of itself. At a 21.38% burden, a $37.95 rate supports a wage of $31.27, not
$37.95 and not $29.83. Offer the rate as the wage and the line runs roughly a fifth over budget
from the first pay period, every pay period, and nobody notices until the reconciliation.
The gap is not small and it is not the same everywhere. Approved burden runs from 14.27%
to 24.86% depending on which FMS the family chose and which employer model they are in. On a
full-time position that spread is thousands of dollars a year in wage the participant either can
or cannot offer.
Which way are you working?
The service
Pick a service and the published rate fills in. Every hourly service in the DDS
rate models is here. Leave it on set my own when you are working from a negotiated figure
rather than a published rate.
Your FMS and employer model
Straight from the Department’s Summary of Approved FMS Employer Burden. The
model list changes with the provider, because not every financial management service is approved
for both.
Workers’ compensation not included
You have to supply the comp amount
The hours
One employee. Run it again for each person on the plan.
A flat annual comp premium changes the answer by hours worked. Percentage burden scales
with the wage, so the arithmetic is clean. A flat premium does not, so the maximum wage depends on
how many hours the person actually works. Fewer hours, less wage the premium can be spread across.
If the schedule changes mid-year, re-run this.
The FMS monthly fee is a different thing, and it is not in this number. That administrative
fee is paid by the regional center outside the participant’s individual budget.
Employer burden is not: it is a real charge against the budget on every paid hour. Counting the
fee as budget spend, or leaving burden out of the plan, are the two most common versions of the
same mistake.
Sole employer means the participant buys the insurance. In the co-employer model the FMS
holds the workers’ compensation policy, which is why their approved burden includes a comp
figure. Under sole employer the participant obtains it themselves, from the FMS where they offer
it, from the State Compensation Insurance Fund, or from an outside carrier, which is why the
Department’s table shows this line as to be determined. If nobody in the meeting can say
where the comp is coming from, the model has not actually been set up.
Working out the number is the easy part. Getting it authorized is different. That is what I do.