DD Waiver Direct Support Professionals

What is a DD Waiver Program?

Medicaid's Home and Community Based Services (HCBS) Developmental Disabilities Waiver, known as the DD Waiver, funds residential care and support services for individuals with developmental disabilities. States administer these programs through networks of private providers. Those providers hire Direct Support Professionals (DSPs) to provide day-to-day care: helping residents with daily living activities, transportation, community access, and personal support.

DSPs do essential, demanding work. Many work long hours, and many are paid in ways that deny them overtime. The most common scheme: classifying DSPs as independent contractors instead of employees, then paying a flat hourly rate with no overtime premium for hours beyond 40 per week.

Why does this misclassification violate federal law?

Under the Fair Labor Standards Act, whether a worker is an employee or an independent contractor depends on economic reality, not the label in a contract. Courts look at factors like how much control the company exercises over the work, whether the worker is economically dependent on the company, whether the work is integral to the company's business, and whether the worker has a genuine opportunity for profit or loss based on their own business decisions.

DSPs at DD Waiver agencies almost always fail this test as contractors. They work assigned shifts at assigned homes serving assigned clients. The agency sets the schedule, establishes the care plans, and determines how services are delivered. The agency holds the Medicaid provider agreement and receives the funding. The DSP has no independent business. They show up, do the work, and get paid. That is the economic reality of employment, and federal law treats it accordingly.

When an employer misclassifies an employee as a contractor, it owes that worker back overtime pay for every hour worked beyond 40 in a workweek during the applicable statute of limitations period, plus an equal amount in liquidated damages and attorneys' fees. A willful violation extends the limitations period to three years.

What has the Department of Labor found in DD Waiver investigations?

This is not a novel theory. The Department of Labor has investigated DD Waiver providers and found systematic overtime violations. In Downes v. Lessons of Life, LLC, the DOL investigated a New Mexico DD Waiver provider before I filed suit and found that the company owed 193 workers a combined $1,079,208.91 in back wages. The company disputed the findings and refused to pay. The case is now in federal court.

The DOL's findings signal that this is an industry-wide problem, not an isolated incident. DD Waiver agencies across the country are using IC classification to shift labor costs onto their workforce.

Current DD Waiver Lawsuits

Current Investigations

I am also investigating potential overtime violations at additional DD Waiver providers in New Mexico. If you are or were a Direct Support Professional at a DD Waiver agency (including QLS or similar residential care providers) and were classified as an independent contractor, your case may have significant value.

Learn more about the current investigation →

What does a DSP need to know about overtime rights?

The federal overtime law has a two-year statute of limitations for most claims, three years if the violation was willful. That clock runs from when you worked the unpaid hours, not from when you discover the violation. Waiting costs you recoverable wages.

The consultation is free. If I take your case, I handle it on a contingency basis. You pay nothing unless there is a recovery, not even costs.