Mayor Brandon Johnson’s Administration Signs New $40 Million Agreement with Favorite Healthcare Staffing
This week, Mayor Brandon Johnson’s administration quietly signed a new $40 million agreement with Kansas-based Favorite Healthcare Staffing to continue to staff the city’s migrant shelters through October of next year. The agreement comes amidst growing criticism concerning the increasing costs of caring for and sheltering the 19,000 migrants who have arrived in Chicago over the past year.
According to the latest census from the city, more than 11,000 asylum seekers are staying in the shelters while 3,000 are living in Chicago police stations. NBC 5 Investigates was the first to report that Favorite Healthcare Staffing has received at least $56 million over the past year to staff the migrant shelters, as per city finance records.
Alderman Brendan Reilly and other citizens have expressed criticism of the hourly rates that Favorite Healthcare Staffing charged the city. An NBC 5 Investigates’ review of invoices for 400 Favorite Healthcare Staffing employees showed that the company routinely billed for 84 hours of work per week, with hourly rates ranging from $50 to $156 for regular pay and from $75 to $234 for overtime, during the four-week period examined.
For employees assigned to housekeeping, Favorite Healthcare Staffing billed the city of Chicago a median pay rate of $17,000 for each of their housekeepers, for four weeks. At that rate, taxpayers potentially paid a median rate of approximately $221,039 annually for each housekeeper supplied by Favorite.
When it came to employees assigned to security, the invoices show that Favorite charged a median payrate of $24,000 for each security guard, for four weeks’ worth of work. That translates to an annual charge, for each security guard, of $312,000. Furthermore, for one registered nurse at the shelters, Favorite Healthcare Staffing billed more than $64,272 for four weeks’ worth of work, meaning taxpayers could’ve potentially paid more than $830,000 in a year for this single nurse.
Ald. Brendan Reilly remarked outside the city council chambers that “whether it’s a federal tax dollar, a state tax dollar or a Chicago tax dollar, it’s still money being wasted. And so we need to see a much better result from the Johnson administration. They claim they’ve negotiated better rates; we will need to see the proof of that. Anything is a better rate than $24,000 a month for one security guard…”
The Johnson administration has stated that the hourly rates were inflated to cover administrative costs such as housing and transportation and that it has worked to re-negotiate those rates, including in this latest agreement. The new contract does detail rate reductions, which the Johnson administration has claimed will lead to additional cost savings, although the reductions weren’t equally dispersed among all positions. Some rates were reduced more than others.
The Johnson administration has also said that what hourly rates the workers receive could depend entirely on if they’re hired locally from Chicago or if they are from out-of-state and need Favorite to continue to cover their housing and transportation expenses. The newly reduced rates ranged from $40 to $156 per hour.
For example, an NBC 5 Investigates’ review of the new rates found that while Favorite Staffing used to bill for $80 per hour for some of its workers, those rates will be reduced to $68 per hour if the staffer requires housing to be covered, or as low as $48 if they’re a local hire.
At the same time, the invoices show that Favorite Healthcare Staffing billed for 84 hours per week including overtime for most of its employees. This means that even with hourly rate reductions, Favorite Healthcare Staffing could still charge the city for six-figure annual salaries for most of its employees working in the shelters.
Favorite Healthcare Staffing has not returned repeated calls and emails seeking comment. A spokesman for Mayor Brandon Johnson did not respond to the recent criticism but did state in an email that the “Johnson administration has been working closely with Favorite to control costs, which encourages Favorite to shift to a regional rather than a national staff recruitment model.” The emailed statement also mentioned that the Johnson administration has re-negotiated these rates and that starting in
