A federal appeals court has upheld a rule requiring that in-home care workers assisting people with disabilities be paid minimum wage and overtime.

The U.S. Court of Appeals for the District of Columbia Circuit sided with the Obama administration on Friday in a case challenging the U.S. Department of Labor’s authority to mandate a pay increase for many of the nation’s 2 million home care workers.

Labor Department regulations issued in 2013 extended minimum wage and overtime protections to home care workers for the first time. Under the rules, most caregivers must receive at least the federal minimum of $7.25 per hour and qualify for time-and-a-half if they work more than 40 hours per week.

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The wage protections were set to take effect at this start of this year, but were struck down in January by U.S. District Judge Richard Leon who said the Labor Department had overstepped its authority.

On Friday, however, a three-judge panel found otherwise. In a 24-page opinion, Judge Sri Srinivasan wrote that the Labor Department’s decision to extend overtime and minimum wage protections “is grounded in a reasonable interpretation of the statute and is neither arbitrary nor capricious.”

Trade groups representing agencies that employ many in-home care workers brought the court challenge. They said the pay hike could make such care unaffordable.

Some self-advocates have also argued that the pay increase could leave people with disabilities without the care they need to remain in the community.

Even in the midst of the appeal, the Labor Department continued to encourage states to move forward with plans for implementing the new rules.