Taxpayer supported companies fail to pay workers, with impunity
Each year, some private companies dependent on Medicaid funding don't pay their employees. A News & Observer review of cases shows that in fiscal year 2014, mental health agencies, home health care companies and group homes had the most unresolved wage payment cases than any other single industry in North Carolina. However, when companies don't pay their workers, the state lets it happen with impunity; Medicaid reimbursements continue to come in and the businesses don't lose their licenses.
State Labor Commissioner Cherie Berry, who has the power to crack down on employers who don’t pay, has long known about companies dependent on public funding that don’t make payroll. She calls these cases “bugaboos” and says she’s aggravated. But she has done little to solve the problem.
She pointed to the state Department of Health and Human Services as the agency to blame. In 2010, Berry sent the DHHS secretary, an appointee of Democratic Gov. Bev Perdue, a strongly worded letter. It described the volume of cases her Wage and Hour investigators handle for companies that rely on funding from Medicaid, the federal-state program that helps pay for health care for poor children, some of their parents, the disabled and elderly.
Subsequent talks between the agencies yielded little. Berry said the problem did not seem to be a priority for DHHS leaders at the time.
She has not tried to engage DHHS in the five years since. During that time, the DHHS secretary was appointed by Gov. Pat McCrory, a Republican like Berry.
Dave Richard, who took over the agency’s Division of Medical Assistance in June, said he and his colleagues had not been made aware of companies under their authority failing to pay workers.
While the agency’s duties revolve around patient care – not a company’s financial management – he said he will evaluate what, if anything, his staff can do.
“My expectation would be if there are multiple incidents of a company not paying its workers and that came to [our] attention ... we’d do an investigation of that provider,” said Richard. “I can’t guarantee you that that’s what happened in the past ... but it would seem that would rise to the level of a concern.”