U.S. Court of Appeals Upholds New York Wage Parity Law for Health Care Workers

Court Says New York Law Not Preempted by Federal Law

As part of a Medicaid reform bill enacted in 2011, the New York legislature passed what is commonly known as the “wage parity law” for home health care workers. The statute, which sought to bring pay for “home health aides” in line with wages for “personal care” aides, establishes a minimum rate of total compensation employers must provide to qualify for Medicaid reimbursement in New York City, as well as Westchester, Nassau and Suffolk counties.

In the case before the Court of Appeals, the plaintiffs, five home health care service agencies and a non-profit organization, filed suit to prevent the New York Department of Health from enforcing the provisions of the wage parity law, alleging:

  • That the new law was pre-empted by two federal statutes—the National Labor Relations Act and ERISA
  • That the statute violated the equal protection and due process clauses of the 14th Amendment

In its opinion, the Court of Appeals rejected assertions that the state of New York did not have authority to set minimum labor standards, as claimed by the plaintiffs. Justice Debra Ann Livingston, writing for the court, concluded that “states have traditionally sought to remedy the problem of depressed wages by regulating payment rates.” Because the law “stabilizes minimum wages for…home care aides in New York City and the surrounding counties”, it is not in contradiction to the goals of the National Labor Relations Act, and is not preempted by it.

The impetus for the wage parity law stemmed from the fact that, while home health care aides generally go through much more extensive training than “personal care” aides, and are trained to provide many more services, they have not been as unionized as personal care workers, leading to a disparity in income. Furthermore, because personal care aides are more likely to work with agencies that have contracts with New York City, they benefit from the city’s living wage law.

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