by Sarah Curry
Director of Fiscal Policy Studies
The U.S. Department of Labor issued a Final Rule in October 2013 that requires the payment of minimum wage and overtime compensation to most home care workers, including most of those whose services are provided through Medicaid-funded programs. This rule has been challenged in court and a Federal district court judge held that the Rule’s major provisions were invalid. The government has filed an appeal asking the U.S. Court of Appeals in D.C. to overturn the lower court orders. The appeal will be fully submitted in early May, and an opinion could come at any time after. This will effect NC’s budget, because if the decision is overturned, states will have to pay this increased minimum wage cost and that will make the state payments for Medicaid increase without much notice.
The Department of Labor (DOL) Secretary Thomas Perez sent a letter to governors regarding the situation. In the letter, Secretary Perez acknowledges that many states are in the midst of budget planning and may not have another budget cycle before the lawsuit is resolved. He encourages governors to take immediate steps toward implementation to ensure states are prepared if the decision is overturned. DOL has stated it will not change the timeline of its enforcement policy if the Administration prevails in the lawsuit.