Socialism: say how a care co-op meets Medicaid's 80% home care pay rule

Co-Authored-By: Claude Opus 5.5 <[email protected]> Claude-Session: https://claude.ai/code/session_01QWPs69B8nQZjtPEUXMKzZx
2026-09-25 13:12:40 -06:00
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@@ -51,6 +51,7 @@ Members get two kinds of money: wages, paid through payroll at no less than the
 - **Tax.** The model argues it's a patronage dividend, which is how co-op tax law pays owners, and that it doesn't carry payroll tax. That's unsettled ([How a Locked Co-op Is Taxed](taxes.md#payroll-tax-on-profit-shares)).
 - **Overtime.** Federal overtime law counts almost everything an employer pays, so the co-op adds the share into the overtime rate, as above. Its definition is broader than the tax law's, so this doesn't settle the tax question either way.
 - **Pension law.** Members' accounts are designed to stay outside it even if the share were counted as pay ([Member Capital Accounts](capital-accounts.md#why-not-pay-it-out-when-you-leave)).
+- **Medicaid's home care pay rule.** From 2030, agencies must spend 80% of certain Medicaid home care payments on care workers' pay. That rule borrows the overtime law's broad meaning of pay, so the share might count. The co-op doesn't count it anyway, to keep one position everywhere, and pays any shortfall as wages ([When People Don't Stay Long](high-turnover.md#when-medicaid-decides-how-much-goes-to-pay)).
 - **State laws on paying wages.** This is the hard one. Many states require wages to be paid on time and in full, forbid employers from taking any back, require final pay within days when someone leaves, and don't let workers sign those rights away. California's definition of wages covers "all amounts for labor performed by employees," however they're calculated ([Cal. Labor Code § 200](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=200)). It's unlawful there for an employer "to collect or receive from an employee any part of wages theretofore paid" ([§ 221](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=221)), and no private agreement can set those rules aside ([§ 219](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=219)). If a credit in a member's account counted as wages there, holding it for years, charging losses to it and pausing it in a bad year could all be illegal, for members who stay as well as those who leave.

 State co-op law supports the owner's-share reading, but it doesn't settle it. Massachusetts, California and Washington each have a law for worker co-ops that lets a member's share of profit be paid in "cash, credits, written notices of allocation, or capital stock," lets the bylaws "permit the periodic redemption of written notices of allocation," and forbids payouts that would make the directors personally liable ([Mass. Gen. Laws ch. 157A, §§ 8–9](https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter157A/Section9); California's is Corporations Code § 12317, [added in 2015](http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_0801-0850/ab_816_bill_20150812_chaptered.html); Washington's is [RCW 23.78.090](https://lawfilesext.leg.wa.gov/Law/RCW/RCW%20%2023%20%20TITLE/RCW%20%2023%20.%2078%20%20CHAPTER/RCW%20%2023%20.%2078%20.090.htm)). Those laws say how the money can be paid. None of them says it isn't wages, and a wage law's ban on signing rights away is the more specific rule. How far each state's wage law reaches pay that depends on the whole business's profit differs from state to state and isn't settled. So: