IHC says it cannot afford an Employment Court ruling that employees should be paid the mimimum wage for night shifts.
The court has issued an interim ruling on a case brought by unions representing workers who do sleepover shifts at community homes for the disabled.
In May, Levin support worker Philip Dickson told the court that staff worked the 10-hour shift for $34.
His employer, Idea Services, said support staff are rarely disturbed during their shifts, and are paid hourly for any work done if awakened.
But the Employment Court says sleepover shifts are classed as work.
Employees will now get at least $12.50 per hour for sleepover shifts, compared to a total of $34 they currently get for a 10-hour shift.
The court has asked Business New Zealand and the Council of Trade Unions for submissions on how the wages should be paid.
But IHC says it needs more Government funding to pay its employees more. It says they do 250,000 sleepover shifts per year and the extra costs will be "millions".
The Service and Food Workers Union says the ruling brings New Zealand into line with other countries.