NELP Report: Centers for Medicare and Medicaid Services Intentionally Suppressed Wages for Tens of Thousands of Federally Contracted Call Center Workers

Monday, May 24, 2021

Coinciding with the report, Maximus workers organizing their union with the Communications Workers of America (CWA) filed a DOL complaint calling on the Biden Administration to raise pay rates for federally contracted call center workers

NATIONWIDE – A new report from the National Employment Law Project (NELP) released today reveals the Centers for Medicare and Medicaid Services (CMS) has suppressed wages for federally contracted call center workers – a workforce that is predominantly women of color – for years. CMS contracts with Maximus, Inc. for this call center work, which includes handling 1-800 lines for Medicare and the ACA Marketplace. Maximus employs about 10,000 workers at 11 call centers in nine states to perform this work. NELP found that Maximus also played a role in suppressing wages by opposing workers' efforts to organize with the Communications Workers of America (CWA) to win better pay and working conditions.

NELP's report, which draws upon documents obtained by FOIA requests, exposes how CMS repeatedly lobbied the U.S. Department of Labor to prevent pay rates for Customer Service Representatives (CSRs) from being increased under the Service Contract Act, which sets prevailing wage rates for federal contract service workers. Maximus call center workers make on average about $30,000 a year or less, while their directly-hired counterparts at the Internal Revenue Service and Social Security Administration call centers, doing the same job, earn an average of more than $50,000 a year.

In conjunction with the release of NELP's report, today Maximus workers organizing their union with CWA filed a complaint with the U.S. Department of Labor calling on the Biden Administration to revise pay rates for tens of thousands of federally contracted CSRs nationally who continue to earn unfair wages. CWA's complaint and NELP's report come weeks after President Biden signed an Executive Order raising the minimum wage for federally contracted employees to $15 an hour.

"I'm grateful to President Biden for raising the minimum wage for the millions of federally contracted employees like me and my co-workers who have been earning as little as $10.80 an hour. This is an important first step to ensuring livable wages and better working conditions for Maximus call center workers nationwide," said Jamie Brown, a Maximus call center employee in Hattiesburg, MS. "But this fight is far from over. We are organizing a union and need Biden's support in our fight to truly close the pay gap. Through collective bargaining, and a process that includes our voices in deciding fair wages and policies that make sense for our families, we would be able to lift ourselves out of poverty and not just struggle every day to get by."

Key findings from the report and DOL complaint include:

  • CMS's directly-hired workforce of about 6,000 employees is 45.1% people of color and 67% female, while the CMS contracted call center workforce, which is nearly double the size of CMS' directly-hired workforce, is about 66.8% people of color and 73.1% female.
  • Maximus employees at several CMS call centers – such as at the call center in Bogalusa, La., whose staffing is about 75% workers of color and over 80% female – would earn about 22% more than their current pay if CSR wage rates had been set fairly and accurately.
  • Directly-hired call center employees at the Internal Revenue Service and Social Security Administration earn an annual average of $53,183 and $52,868, respectively, while most of the Maximus CMS call center workers are paid $30,000 or less annually.

"We are inspired by the powerful, knowledgeable group of worker leaders at Maximus who are calling on their employer and the federal government to recognize their fundamental human rights to good jobs, a fair wage, and the right to exercise workplace democracy," said Rebecca Dixon, Executive Director of the National Employment Law Project. "The federal government must set a higher standard."

Maximus call center workers have played an essential role throughout the COVID-19 pandemic ensuring that Americans have necessary access to healthcare. Meanwhile, these workers have been struggling to get by, with the largest share of them earning wages pegged to the lowest federal pay category, GS-1, which is rarely even used anymore and impacts the methodology DOL uses to determine wage rates. More Maximus CMS call center workers are classified at the GS-1 level than in the federal government's entire directly-hired workforce of over two million. The current Maximus-CMS contract is set to expire in 2022, so CMS is preparing the solicitation process.

"For at least a decade, the suppression of wages by CMS was swept under the rug and only acknowledged by the essential call center workers who knew their pay wasn’t matching that of their counterparts. This is a direct reflection of the federal government's failure to investigate and understand how their policies negatively impact vulnerable communities and communities of color," said Rev. Dr. William J. Barber II, president and senior lecturer of Repairers of the Breach and co-chair of the Poor People's Campaign: A National Call for Moral Revival, who authored a foreword to NELP's new report. "NELP and CWA have done the heavy lifting in exposing the unjust policies and practices that so often take advantage of hard working Americans. It is now up to the Biden administration to fix the harm that has been done here and follow through on its economic and racial justice commitments."

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MEDIA CONTACT: Zoe PiSierra, zoe.pisierra@berlinrosen.com, 603.339.0042

About the National Employment Law Project:
The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting underpaid and unemployed workers. For more about NELP, visit www.nelp.org. Follow NELP on Twitter at @NelpNews.

About the Communications Workers of America:
The Communications Workers of America represents working people in telecommunications, customer service, media, airlines, health care, public service and education, and manufacturing.

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