New York State Announces Health Care and Mental Hygiene Worker Bonus Program Requiring Employers to Administer Bonuses

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On August 3, 2022, New York Governor Kathy Hochul introduced the opening of the $1.2 billion greenback Well being Care and Psychological Hygiene Employee Bonus Program geared toward rewarding and retaining frontline healthcare and psychological hygiene employees. Handed as a part of the FY2023 New York State Finances in April 2022, this program requires that eligible well being care suppliers (see “Certified Employers” beneath) administer and pay as much as $3,000 in bonuses to full-time, part-time or impartial contractor well being care and psychological hygiene practitioners, technicians, assistants, assist workers, and aides who present hands-on well being or care companies in New York State and earn lower than $125,000 per yr (see “Eligible Staff” beneath). Along with the governor’s launch saying the opening of this system, which is codified in Half ZZ of Chapter 56 of the Legal guidelines of 2022, the State Division of Well being (DOH) launched an informative web site with steering geared toward quickly implementing this system, with the primary deadline for employers’ submissions arising shortly on September 2, 2022.

Certified Employers

Certified Employers are: employers with at the least one worker and that (1) invoice below the state Medicaid plan; or (2) invoice below the house or community-based companies (HCBS) waiver; or (3) that invoice for Medicaid by means of a managed care group or managed long run care plan. Sure instructional establishments or different funded applications may be eligible. This definition consists of suppliers, amenities, pharmacies, and school-based well being facilities licensed below the Public Well being Legislation, Psychological Hygiene Legislation and Instructional Legislation in addition to sure applications funded by the State Workplace of Psychological Well being, the Workplace for the Getting older, the Workplace of Habit Companies and Helps, the Workplace for Individuals with Developmental Disabilities, and the Workplace of Youngsters and Household Companies.1

Eligible Staff

Full-time and part-time staff, in addition to impartial contractors, could also be eligible. As set forth by the DOH, this system is out there to employees who’re front-line well being care and psychological hygiene practitioners, technicians, assistants and aides that present hands-on well being or care companies to people. To be certified, employees:

  1. should be constantly employed by a professional employer at some stage in at the least one vesting interval;
  2. should have a title on the record of titles from the laws and the DOH;
  3. should have an annualized base wage (excluding time beyond regulation and bonuses) not exceeding $125,000 per yr; and
  4. should not be suspended or excluded from the Medicaid program2 throughout the vesting interval or when the fee is made.

Eligible Employee Titles: The laws units forth an inventory of eligible employee titles, and authorizes the DOH to find out extra titles. Below that authority, the Commissioner of Well being added the titles of “medical fellow” and “medical resident.” DOH steering explains that employees should assist the availability of patient-facing care supplied inside a affected person care unit of a hospital or different institutional medical setting in assist of treating and caring for sufferers. It stays unclear if extra titles are deliberate to be added, together with employees in non-institutional settings, or when extra titles can be introduced.

Homecare Aides Excluded: The DOH defined in its FAQs that homecare aides and different comparable titles (dwelling well being aide, private care assistant, dwelling maker, and so forth.) should not an eligible title for the bonus program as a result of the state already enacted a $2.00 per hour wage improve that goes into impact on October 1, 2022 for such employees, and can add one other $1.00 per hour subsequent yr, as set forth in NY Public Well being Legislation § 3614-f. Fiscal intermediaries working below Social Companies Legislation SOS § 365-f are additionally categorically excluded from participation in this system.

The FAQs notice, nonetheless, that “sure Article 36 entities, comparable to Licensed Dwelling Well being Companies (CHHAs) and Licensed Dwelling Care Companies Companies (LHCSAs), could make use of eligible titles (e.g., Nurses, PT/OT Therapists, speech pathologists, and so forth.) that present hands-on companies, and could also be eligible for the bonus in the event that they meet the entire worker eligibility necessities.”

Vesting Schedules

Pursuant to its statutory obligation, on August 3, 2022, the DOH introduced a schedule of 5, six-month vesting intervals:

Vesting
Interval

Vesting Interval
Begin Date

Vesting Interval
Finish Date

Employer Submission
Begin Date

Employer Submission
Shut Date

One

October 1, 2021

March 31, 2022

August 3, 2022

September 2, 2022

Two

April 1, 2022

September 30, 2022

October 1, 2022

October 31, 2022

Three

October 1, 2022

March 31, 2023

April 1, 2023

Could 1, 2023

4

April 1, 2023

September 30, 2023

October 1, 2023

October 31, 2023

5

October 1, 2023

March 31, 2024

April 1, 2024

Could 1, 2024

For the primary vesting interval, claims should be submitted by employers no later than September 2, 2022. Notably, as mentioned additional beneath, the primary vesting interval is the six months instantly previous the legislation being handed as a part of the FY2023 New York State Finances.

Bonus Entitlements

Below this system, bonuses are set based mostly upon the variety of hours labored by the worker for the vesting interval at difficulty. The utmost bonus an worker can obtain in any vesting interval is $1,500. Staff are eligible for as much as two vesting intervals per employer and will obtain as much as a complete of $3,000 below this system. For every vesting interval, eligible staff are entitled funds based mostly on the next:

  • Eligible non-exempt staff who work 20 to 30 hours per week for the vesting interval are entitled to a $500 bonus for the vesting interval.
  • Eligible non-exempt staff who work 30 to 35 hours per week obtain a $1,000 bonus for the vesting interval.
  • Eligible non-exempt staff who work 35 or extra hours obtain a $1,500 bonus for the vesting interval.
  • Full-time overtime-exempt eligible staff obtain a $1,500 bonus for the vesting interval.

Use of accruals or depart time, together with depart below the Household and Medical Go away Act, might be credited in direction of an worker’s work hours for a vesting interval, together with all different hours labored in that interval.

The bonus claims course of outlined within the legislation offers for eligible staff to signal an attestation type that confirms their eligibility below this system. Whereas employers should get hold of staff’ signatures on the attestation varieties, staff can’t file a declare for a bonus fee from the state. Slightly, the administration and fee of bonuses is to be dealt with solely by certified employers topic to strict audit necessities from the state.

Tax and Different Ramifications

Whereas the statute and steering present some info on how employers are required to deal with bonus funds below this system, a number of questions stay. It’s clear from legislation and steering that:

  • Bonuses can’t be used to cut back any portion of wages in any other case as a result of an eligible worker below relevant legislation, together with the Wage Parity Legislation or the Labor Legislation, or a collective bargaining settlement.
  • Bonuses are taxable on the federal degree and needs to be included in eligible staff’ IRS Type W-2s; such bonuses should not thought of revenue on the state and native degree.
  • Bonuses should not thought of revenue for public help and advantages applications.

Left unaddressed by the statute and up to now within the steering is how such bonuses below this program can or should be handled for the needs of time beyond regulation, which usually should embody non-discretionary bonuses within the calculation of an worker’s “common charge of pay” that’s used for the calculation of time beyond regulation charges of pay.

Employer Necessities

Decide Worker Eligibility: Employers are answerable for figuring out if staff are eligible based mostly upon the eligibility standards outlined above. Failure to determine, declare and/or pay greater than 10% of eligible staff could lead to enforcement actions, as outlined beneath.

File Claims for Eligible Staff: The legislation directs certified employers to trace hours labored by eligible staff all through the vesting intervals and to submit claims for reimbursement of worker bonus funds by means of the web portal for bonuses in accordance with the schedule established by the DOH.

Make Bonus Funds: Bonuses should be paid to eligible staff inside 30 days of the employer’s receipt of bonus fee. There isn’t any obligation below this system for certified employers to pay bonus funds to staff earlier than receipt of bonus fee cash from the state.

Recordkeeping: Employers should preserve data of hours of eligible staff, and paperwork to substantiate bonus claims, for at the least six years. Certified employers additionally should make info used for figuring out worker eligibility out there to pertinent regulatory companies, together with the U.S. Division of Well being and Human Companies, the New York Departments of Labor and Well being, the Medicaid Inspector Basic, and the Legal professional Basic’s Medicaid Fraud Management Unit.

Enforcement and Oversight

The DOH and the Medicaid Inspector Basic are tasked with audits of employers, and any improperly paid claims below the bonus program might be handled as Medicaid overpayments. Violations or failures below the Well being Care Employee Bonus Program are topic to sanctions and penalties the place the employer:

  • Claims a bonus not as a result of an worker below this system’s necessities, or makes a declare for an incorrect quantity.
  • Claims and receives a bonus, however fails to pay it.
  • Fails to say a bonus as a result of an worker.

Employers in such conditions might be topic to penalties of $1,000 per violation. Employers that fail to pay a bonus for greater than 10% of bonus eligible employees could also be topic to extra penalties and sanctions below the Public Well being Legislation. Employers are additional prohibited from recovering any bonuses paid out to staff the place the claims are discovered by the state to be improper.

Collective Bargaining Implications

Because the bonus program is non-discretionary in nature — in that well being care employers are required to take part and submit bonus functions to the state — there could also be no decisional bargaining obligations below the Nationwide Labor Relations Act. Nonetheless, there might be “results” bargaining obligations as labor organizations are prone to submit detailed requests for info (“RFIs”) regarding worker eligibility, titles, hours labored and gross pay quantities, and timeline for fee, in addition to info outlining the employer’s intentions in regards to the attestation course of. As well as, unions might request instant labor-management discussions to realize higher understanding of an employer’s efforts to adjust to the bonus program and in the end get hold of details about the employer’s supposed or precise submission to the state. Employers ought to seek the advice of their collective bargaining agreements and counsel to find out potential bargaining obligations, significantly with the brief turn-around time earlier than the primary submission shut date of September 2. Likewise, bonus-related RFIs needs to be analyzed below the identical customary that the employer would apply to some other wage-related info request. The Nationwide Labor Relations Board could discover RFIs regarding compliance with the bonus program to be “presumptively related” (the usual for permissibility for RFIs) to the labor-management relationship.

Employer Takeaways

Whereas extra steering is predicted, given the forthcoming September 2, 2022 submission deadline in reference to the primary vesting interval, certified employers promptly ought to start ascertaining eligible employee titles of their operations and monitoring hours labored throughout the vesting interval to find out bonus entitlements. Certified employers additionally ought to familiarize themselves with required attestation varieties and plan on methods to talk with eligible staff concerning the availability of bonuses, the standards for similar, and the necessity for (and penalties of not having) attestation varieties signed by eligible staff. Certified employers ought to proceed to observe the standing of this system and look ahead to any additional steering issued by the DOH.

 

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