Proposition 206: What Does It Mean for EPI-HAB Phoenix, Inc.?

EPI-HAB Phoenix, Inc. faces a big question in 2017: As Arizona’s controversial new wage rule kicks in, will this nonprofit company employing the disabled continue to thrive…or struggle?

The passing of Proposition 206 is great news for Arizona workers, but many business owners fear varying degrees of fallout, including an increase in automation, job loss and the shuttering of beloved small businesses.

What is EPI-HAB, and how does it operate?

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For nearly sixty years, EPI-HAB Phoenix, Inc., unlike most other nonprofit organizations, has been self-sufficient. Employing hundreds of individuals with epilepsy and other challenges, the company has thrived without receiving outside help.

“EPI-HAB is unique in that we do not solicit donations or charitable contributions, receive any grants – government or otherwise, nor do we conduct fundraisers,” explained Matt Redmann, Executive Director of EPI-HAB. “EPI-HAB operates and competes, for the most part, as a for-profit business.”

The 501(c)3 organization was founded in 1958 by a group of business and medical professionals who volunteered their time and efforts to form a company providing meaningful employment opportunities for individuals with epilepsy. Government grants and other funds helped launch EPI-HAB, but the goal from the beginning was for the company to become self-supporting.

The goal was quickly achieved, and over the years, EPI-HAB has actually been able to donate excess profits to local charities to advance the study of epilepsy. Additionally, with the health industry’s breakthroughs in the field of epilepsy, EPI-HAB expanded its mission “to provide meaningful employment for individuals with epilepsy and other challenges.”

What did Proposition 206 change?

On January 1, Arizona’s minimum wage increased to $10 an hour, a nearly 25 percent jump from the current $8.05. The ballot measure also calls for the minimum wage to continue increasing in 50-cent increments to $12 by 2020, and employers are now required to pay for sick leave.

EPI-HAB employs around 30 people, and with most previously making less than $10 an hour, the majority of its staff received raises this month.

What does this mean for EPI-HAB?

Unfortunately, EPI-HAB doesn’t have a vast overhead that can be cut to support these raises, and there is no profit margin to reduce. The logical answer may be to raise prices to cover the added payroll costs, but the company fears its major customers throughout the U.S. may look to automate tasks or seek out cheaper labor.

However, undaunted by change, Redmann says he’s up to the challenge and has set a goal to increase sales by $40,000 – $80,000 to cover the year’s added payroll.

“I’m going to work my butt off to avoid having to raise costs, reduce benefits or trim staff,” said Redmann.

How can you support EPI-HAB’s mission?

EPI-HAB helps businesses, large and small, overcome challenges with growth and logistics.  The company helps save time, money and space with its hand labor solutions; including mailings, inspection/cleaning, assembly and custom packaging, storage and order fulfillment.

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EPI-HAB is also suited for jobs of all sizes, from the large business needing increased production during its peak season to the individual who needs some help with a bulk mailing. Employees have taken on important projects for local professional sports teams as well as medical device manufacturers.

To help offset this year’s losses, please consider EPI-HAB for any labor-intensive job! Contact Matt Redmann at 602-254-7027 or through email at matt@epihab.org.

 

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