D.C. Continues to Make Strides Towards Compensation Equity

Advocates in Washington, D.C. have championed early childhood for decades. In 2008, D.C. passed universal, full-day pre-K for three- and four-year olds. But, according to BB Otero, former Deputy Mayor for Health and Human Services, the vision was always to invest in children from birth to five years old. Aware of the unintended consequences of offering universal pre-K on the sustainability and availability of infant and toddler programs, stakeholders worked to make the case for stabilizing the earlier years of the birth-to-five continuum.

This culminated in the Birth-to-Three for All DC Act of 2018 (the Act), which increased access to health services and subsidized child care for families. The Act also called for developing a salary scale for the early childhood workforce that would achieve compensation parity “equivalent to the average base salary and fringe benefits of an elementary school teacher employed by District of Columbia Public Schools with the equivalent role, credentials, and experience.”

The past few years have focused on securing funds to implement the Act. Earlier this year, following recommendations from the Early Childhood Educator Equitable Compensation Task Force, the D.C. Council established the Early Childhood Educator Pay Equity Fund with funds from a tax increase on D.C.’s wealthiest residents. The task force’s final recommendations for how to use these funds are currently being implemented by the Office of the State Superintendent of Education (OSSE) in two phases.

The report’s main focus was salary, but the Task Force members note that “equitable compensation will ultimately be incomplete without ensuring access to affordable benefits for all early educators.” This is important because child care workers have much lower access to employer-sponsored benefits and a lower rate of health insurance coverage. When child care workers earning a low income are offered pay increases, they may face benefits cliffs, or a loss of program eligibility for public benefits they currently receive. In fact, the minimum salary levels for assistant and lead teachers in the new ECE salary scale are above the Medicaid income thresholds in D.C., Maryland, and Virginia for single adults, meaning that they would no longer be eligible for premium-free health insurance.

This is why the HealthCare4ChildCare program offered by D.C. Health Link’s Small Business Marketplace is an important step towards achieving true compensation parity. If OSSE-licensed child development facilities choose to participate in this program, employees that are D.C. residents will qualify for free health insurance premiums for themselves and their dependents. Employees that are not D.C. residents will have access to free or lower-cost health insurance premiums. Eligibility is not based on income, part- or full-time employment, or citizenship status.

The benefits of this program are substantial. It eliminates the potential financial burden of paying out of pocket a monthly premium of around $1,000 for a family of four for a plan through D.C. Health Link.

D.C. is not the first state to work on health insurance benefits for the early childhood workforce, but it is the first to tie these benefits to a recurring revenue source. During the 2021 legislative session in Washington state, the legislature appropriated $30 million of federal relief dollars to provide premium-free health insurance for low-income employees in licensed child care facilities. The program will continue through 2023. In addition, Washington’s Service Employees International Union 925 representing child care providers secured low-cost health benefits for licensed family home child care providers in their 2021-23 collective bargaining agreement. The agreement lasts until June 30, 2023.

Otero notes that monitoring the Pay Equity Fund will be important to ensure it remains a revenue source that is dedicated to early childhood and robust enough to support both the new salary scale and health coverage. HealthCare4ChildCare is funded through excess Pay Equity Funds, and so far, it has only been guaranteed for the 2023 calendar year.

Moreover, the D.C. Council must identify other revenue sources to provide the additional benefits that District of Columbia Public Schools teachers receive. For example, without paid sick leave, employees may not have the ability to leave work to attend appointments or take time off if they are sick. At a broader systems level, Otero says policymakers will need to think through how the new salary scale could result in wage compression for higher, managerial positions in child care facilities.

As other states push for health coverage and other benefits for the early childhood workforce, it will be important to make sure benefits are funded through a stable and consistent mechanism. At the same time, more could be done to raise awareness of current policy levers and available tax credits to support this population in receiving a benefit that is not only beneficial to their work but also their overall wellbeing.

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