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State Medicaid Directors Seek to Delay FLSA Rule Change on Home Care Worker Wages

May 1, 2014

The National Association of Medicaid Directors (NAMD) asked the U.S. Department of Labor (DOL) to delay the implementation of the new rule that extends federal minimum wage and overtime protections to home care workers under the Fair Labor Standards Act.

In an April 23 letter (pdf) to DOL Secretary Thomas Perez, NASMD requested that the implementation of the final rule be postponed for 18 months.

The new rule is scheduled to take effect on January 15, 2015.

DOL published the final rule in the Federal Register on October 1, 2013, allowing 15 months for implementation. The standard implementation period for regulatory changes is 30 or 60 days, as noted in the NASMD letter.

“This rule is of particular interest to our members because state Medicaid programs are responsible for the financing, delivery and oversight of services that are at the heart of the FLSA rule change,” the letter states.

The association and its members “identified a number of potential complications and uncertainties with the rule language as proposed” early on in the rulemaking process, the letter continues.

“Specifically, in our comment letter and during a meeting coordinated by the Office of Management and Budget Office of Information and Regulatory Affairs, we presented scenarios that illustrated the potential impact on the continuity and quality of care for certain Medicaid enrollees, as well as state capacity to sustain the current scope and reach of some programs and services,” the letter says.

The association has requested that DOL hold off on implementing the new rule for 18 months to “allow the Labor and Health and Human Services Departments to work through and, where appropriate, reevaluate, those areas where unforeseen issues have arisen and outstanding questions remain as it pertains to Medicaid.”

In a Stateline article reporting on the NASMD request, National Employment Law Project Staff Attorney Sarah Leberstein explains that many states have never considered Medicaid payments to be wages.

“It’s a new mindset,” Leberstein said. “The states will have to shift their thinking and take another look at their reimbursement practices and guidelines with the new wage rules in mind.”

DOL solicited public comments when it was revising the rule known as the companionship exemption. The public comment period was extended twice, lasting for nearly three months. Of the 26,000 comments received by DOL, three-quarters were in favor of revising the decades-old companionship exemption to extend home care workers federal labor protections.

Today, fifteen states already have minimum wages and overtime labor protections for home care workers, and another six states and the District of Columbia have minimum wage protections only.

A PHI analysis (pdf) found that nationwide, less than 10 percent of aides regularly work overtime, or more than 40 hours a week.

— by Deane Beebe

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