20-21 NY State Budget, Wage Parity, and You

“Every few years, there’s talk about home healthcare agency owners having to sell their businesses because they can’t make money,” says Mr. Chaskie Rosenberg, Melody Benefits’ founder. “But it doesn’t happen.”

Chaskie has been in business since 1997, so he knows a thing or two about the home health care industry. We reached out to him for his take on the amendments to wage parity law in the 20-21 New York State Budget.

But first, some background:

Wage parity benefits

New York’s Wage Parity Law sets minimum compensation rates for Medicaid-paid HHAs (home healthcare aides) in New York City and Nassau, Suffolk, and Westchester counties.

The “minimum total compensation” has two parts: the base wage and the wage parity benefits. The base wage is always cash wages, while the second part can be cash wages OR employee benefits, such as health, education, or pension.

Current wage parity rates stand at:

When Governor Andrew Cuomo signed the Home Care Worker Wage Parity law in 2011, the state wanted to ensure a living wage for its chronically underpaid HHAs. However, as years went by, some aides still reported not seeing benefits or fair compensation.

Those reports led to an investigation, which eventually led to significant amendments to the Wage Parity Law.

“There were allegations that companies were shortchanging employees and pocketing the money,” Chaskie adds. “In response, the government tightened the screws on wage parity.” 

The 20-21 New York State Budget closes loopholes and forces greater transparency in wage parity reporting. It amends wage parity laws in four ways:

1. Restricts certain distributions of wage parity funds
2. Expands certification requirements
3. Mandates updates to WTPA Notices and Wage Statements
4. Imposes fines and criminal penalties for non-compliance

Let’s look at these changes one by one.

1. Restrictions on distributions of funds

The amendments state that “no portion of the dollars spent or to be spent to satisfy the wage or benefit portion” can go back to the agency “as a refund, dividend, profit, or in any other manner.” 

This would include returning any “unused benefits” to a home healthcare agency.  Wage parity funds can only go to the home health care aides.  

2. Expanded certification requirements

Many home health care agencies provide services under contract with a CHHA (certified home health agency), LTHHCP (long term home health care program), or MCP (managed care plan).

With their contract, agencies must now submit:

• An annual statement of wage parity hours and expenses on DOL Form LS-300.
• An independently audited financial statement verifying those expenses on DOL Form LS-301.

Agencies also have to give a detailed certification to the DOH (Department of Health) by June 1st each year. They submit the form electronically through the eMedNY Provider Portal, affirming that:

1.     All their services are in full compliance with current wage parity laws.
2.     No portion of their wage parity dollars went back to the agency.
3.     They will keep wage parity records for ten years, subject to audit by the DOH.
4.     They submitted the proper forms to each CHHA, LTHHCP, or MCP.

On their end, the CHHAs, LTHHCPs, or MCPs have to review and assess their compliance statements carefully. If they believe an agency is non-compliant, they must report it to the NYDOL. 

Any party who knowingly signs a false certification can be charged with criminal perjury.

3. Updates to WTPA notices and wage statements

Agencies also have to give clearer reports to their aides. 

Under the WTPA (Wage Theft Protection Act), employers are required to give workers a Notice of Pay Rate and weekly wage statements.

Beginning October 1, 2020, those statements have to include the following wage parity details:

• The type of each wage parity benefit (ex. pension, healthcare, etc.)
• The name and address of the entity providing the benefit
• The benefits portion of the employee’s total compensation

The NYDOL released a new Notice of Pay Rate Form LS 62 for agencies to use, but no new wage statement form. And the Notice of Pay Rate came without any guidance on how to complete it. 

When the law first took effect, agency teams had to scramble to get legal counsel and support from TPAs to issue new statements to their HHAs.

4. Penalties for Wage Parity Law violations

The new amendments have teeth.

Any agency that knowingly pays their HHAs too little is now guilty of a misdemeanor. The punishments are:

• First offense – $500 fine, 30 days imprisonment, or both
• Second offense – $1,000 fine, and the contract on which the violation occurred and all payments under that contract will be forfeited. That entity will no longer be able to receive Medicaid funding for services.

But that’s not all. The Notice of Pay Rate requirements also fall under the WTPA, and non-compliance with the WTPA can incur fines of up to $10,000 per employee! 

Any wage parity fines are in addition to the WTPA fines. 

Take the long view

Despite the upheaval the amendments caused, Chaskie takes the long view. “There are always new changes and legislation. There’s always a worry that the industry is shutting, but in a few months, you figure it out, and life goes on.”

He emphasizes the importance of following the laws without looking for loopholes or shortcuts.

“We created our model based on what we thought was right, and more and more companies are coming in our direction. They see that our agencies have the highest retention rates in the industry.”