Misled and Abandoned by State, More Than 2,000 Direct Caregivers Likely to Sue for Millions in Lost Overtime Pay

(Lower left: Attorney Repps D. Stanford, a partner of the Moody & Stanford, PC law firm, addresses members of the New Mexico Legislative Health and Human Services Committee.)

Attorney Warns Legislators: Direct Caregivers to Disabled Likely to Sue Private Agencies Misled By Lujan Grisham Administration

On Wednesday, Oct 23, 2024, an experienced and respected employment lawyer, informed members of the New Mexico Legislative Health and Human Services (LHHS) Committee that many direct care workers, misclassified as independent contractors instead of as employees, are readying class action lawsuits against private provider agency employers.

The state government contracts with these private provider agencies to hire direct care workers to serve the members of developmentally disabled community.

(“Direct care workers are workers who provide home care services, such as certified nursing assistants, home health aides, personal care aides, caregivers, and companions.” – U.S. Department of Labor.)

Many of the private employers argue the state government essentially encouraged them to hire the direct care workers as independent contractors instead of as employees.

By doing so, among other concerns, they did not pay the workers for overtime they were entitled to as employees.

The attorney, Repps D. Stanford (a partner of the Moody & Stanford, PC law firm), represented Quality Life Services, LLC, (one of more than eighty provider agencies the state contracts with to provide care to developmentally disabled New Mexicans), in a recently settled class action lawsuit brought by scores of misclassified employees.

Quality Life settled with its employees paying more than $1 million in lost overtime.

The owners have stated from the beginning that the state of New Mexico’s agencies that established the rates, were aware of the treatment of their employees as independent contractors.

They point to DDSD management employee Angie Brooks as having knowledge of the practice of classifying these direct service employees as independent contractors.

In October of 2023, another Quality Life attorney wrote in an email to Department of Health attorney Chris Woodward that, “My clients are being sued for allegedly misclassifying their DSPs as independent contractors rather than employees. Quality Life Services’ owners, April Licon and Sally Chavez, have spoken to Angie Brooks regarding the same. It is my understanding that Ms. Brooks has knowledge regarding the DD Waiver provider agency landscape and, specifically, knows that most agencies classify their DSPs as independent contractors rather than employees.”

Other provider agencies feel state officials misled them and have exposed them to millions of dollars in claims that have yet to be officially filed.

Stanford stated at the LHHS meeting that, “… plaintiffs’ attorneys are now not only suing my client, but I think it’s safe to say that they’re going to be suing almost every organization that currently has individuals that are in an independent contractor capacity.”

According to records released through an Inspection of Public Records Act request made by The Candle late this summer of the New Mexico Health Care Authority (HCA) and the New Mexico Developmental Disabilities Supports Division (DDSD), there are more than 2,000 employees being paid as independent contractors.

Earlier this month, The Candle reported that Health Care Authority Secretary Armijo, with over twenty years of working on New Mexico Medicaid matters, was aware or should have been aware of this misclassification of direct care workers, and the failure to pay them fairly.

Armijo, and Secretary of the Department of Workforce Solutions (DWS) Sarita Nair, were aware of the class action federal lawsuit brought against Quality Life in southern New Mexico seeking years of overtime pay they were denied – a lawsuit that was recently settled for $1.5 million provided to the workers unjustly denied their overtime pay.

The HCA over the years, jointly with DDSD, developed the rates paid to the provider agency employers that in turn determine the amount of pay these direct are workers receive.

Advocates for the developmentally disabled community have warned HCA and DDSD that the rates the state developed, incorrectly blended the lower costs of paying workers as independent contractors instead of paying them as employees.

Many of the same advocates believe HCA did so to artificially lower the cost to the state, and that DWS basically looked the other way while workers were denied their overtime.

In official documents prepared for the establishment of those rates, the state claimed the division that engages and authorizes the payment for the services of these workers, “does not have the responsibility to ensure providers follow labor laws.”

Secretary Nair has been aware of this injustice since at least February of 2023 – and likely before, but has refused for weeks to answer questions sent to her by The Candle.

Her agency has the responsibility to enforce labor laws in New Mexico that would have protected these workers.

And there is a strong feeling Nair should have intervened with Armijo and others in the administration, including the Governor, to insist that the state insure these workers are classified as employees and not illegally as independent contractors.

While there are legitimate uses and classification of certain workers as “independent contractors,” the overwhelming number of workers who work as direct service professionals serving the developmentally disabled clients, which the DOH and HCA pays for, are considered under federal labor law to be employees, and NOT independent contractors.

Nair’s agency, the Department of Workforce Solutions, clearly has the responsibility to enforce the labor laws related to misclassification of workers and overtime pay.

The Candle will be updating this reporting over the next several days.