Outsource or In-House? The Best Approach to NY Wage Parity Benefits
Can you administer NY wage parity benefits on your own?
“The answer is yes,” says Shaya Sternhill, Melody Benefits Head of Marketing and Business Development. “Technically, a home healthcare agency COULD manage wage parity benefits on its own.”
The real question is, ‘Why would you want to?”
Do you do payroll on your own? Do you service your car or fix your plumbing?
Probably not. Busy (and effective!) people quickly learn to outsource whatever they can and focus on what they do best.
Which is why it makes sense to hire a wage parity TPA (third party administrator), the same way you hire a payroll company, plumber, or car mechanic.
But hiring a TPA is about more than convenient outsourcing.
Doing it yourself may seem to save money in the short run. But the long term costs can be dramatic, including penalties, extra staffing, and employee dissatisfaction.
Here’s why using a TPA pays for itself:
1. You’ll save time = money
Administering wage parity benefits is time-consuming.
And time equals money.
If you manage your wage parity benefits, you’ll be paying employees to fill out paperwork, maintain records, and stay on top of regulations.
But your most significant time drain may be employee communication and experience. HHAs need quick, accurate answers to a stream of time-sensitive questions:
- Where can I use my benefits?
- How do I set up my account?
- How do I get my PIN?
- How do I file a claim?
- Do my benefits rollover to next month?
“We field 250 customer service questions a day from home healthcare aides,” says Shaya.
Managing your wage parity benefits can require a full-time staff member for customer service alone! Hiring a TPA instead takes the wage parity workload off your employees.
Maybe you’re thinking, “Okay, why bother with this? I’ll just pay cash.” However, benefits are almost always more cost effective than cash payments. Here’s how wage parity benefits improve cash flow and save money on payroll taxes and overtime.
2. You’ll get help when compliance get confusing
NY wage parity laws are detailed, complex, and sometimes unclear. Plus, they keep changing.
For example, the 2020-2021 state budget bill amended New York’s Wage Parity Law in a few significant ways. Beginning in October 2020, agencies had to include additional information on Notice of Pay Rate forms and weekly wage statements. That documentation is required for each employee by the Wage Theft Prevention Act (WTPA).
The New York Department of Labor (NYDOL) released a new Notice of Pay Rate Form LS 62 for agencies to use. But many agencies found the form confusing.
Agencies were scrambling. They needed to issue new Wage Notices and updated wage statements for all their aides. The details were overwhelming and ambiguous, while non-compliance came with hefty penalties,
The new bill added fines and criminal penalties for undercompensating HHAs.
Plus, the penalty for non-compliance with the WTPA is up to $10,000 per employee!
“We researched and studied the new laws. Every agency has to seek its own legal counsel, of course, but we reached out to our agencies to educate and answer questions,” says Shaya. “That’s one of the benefits of working with a TPA.”
3. You’ll avoid costly mistakes
And even when the laws remain stable, wage parity compliance is tricky. It’s all too easy to make costly mistakes if you do wage parity on your own. For example:
- Do all your benefits qualify for wage parity? The New York Labor Law is specific.
- Are you calculating your benefits’ spends accurately? If not, you could face penalties, audits, and lawsuits.
- Are your records correct? Agencies often use Excel spreadsheets, but entering information just one line off can corrupt the entire file.
“When agencies send us their payroll reports, we often catch faulty reports. We enter all our information into proprietary software that reduces the risk of error,” explains Shaya.
4. You’ll give your employees an outstanding wage parity experience
When done right, HHAs appreciate the perks of wage parity benefits. They reciprocate with commitment and positivity.
And when it comes to employee experience, TPAs definitely have an advantage. You have your hands full managing employees, clients, and Medicaid payments.
But a TPA lives and breathes wage parity. It can focus on bringing you and your employees the best in wage parity benefits.
“We dream about wage parity benefits,” jokes Shaya. “We’re always improving our service.”
Shaya describes some Melody Benefits features which make life as an HHA receiving benefits easier and even more fun.
- Educational materials to help HHAs understand and use benefits
- Prompt answers to HHA questions
- Robust, transparent reports to track employee usage