{"id":5621,"date":"2022-10-21T17:43:19","date_gmt":"2022-10-21T17:43:19","guid":{"rendered":"https:\/\/melodybenefits.com\/?p=5621"},"modified":"2023-01-20T14:17:31","modified_gmt":"2023-01-20T14:17:31","slug":"ny_home_care_worker_wage_increase","status":"publish","type":"post","link":"https:\/\/melodybenefits.com\/ny_home_care_worker_wage_increase\/","title":{"rendered":"NY Home Care Worker Wage Increase: Save Thousands with Wage Parity Benefits"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Spoiler alert: Money doesn\u2019t grow on trees.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Which is why the Home Care Worker Wage Increase is creating waves and a touch of panic in the home healthcare community.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><b>As mandated by the 22-23 NYS Budget, the hourly minimum wage for NY home care workers will increase by $2.00 on October 1, 2022<\/b><span style=\"font-weight: 400;\">. A year later, on October 1, 2023, it goes up an additional dollar.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Unions and other advocates lobbied hard for this raise, and our dedicated home care workers undoubtedly deserve it. Still, the law puts home healthcare agencies in a difficult position.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">To answer questions and help agencies plan, the <\/span><a href=\"https:\/\/www.nyshcp.org\/chcfoundation\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">CHC<\/span><\/a><span style=\"font-weight: 400;\"> (Community Health Care Services Foundation) hosted a webinar called \u201cPreparing for the October 1 Home Care Worker Wage Increase.\u201d (CHC is the educational affiliate of <\/span><a href=\"https:\/\/www.nyshcp.org\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">HCP<\/span><\/a><span style=\"font-weight: 400;\">, the New York State Association Of Health Care Providers.)\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The webinar featured Emina Poricanin of Poricanin Law, a recognized expert in home healthcare law. Emina addressed a broad range of concerns about the legislation, including<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Which home care workers are included?<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Do agencies need to issue new wage notices?<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">How the law affects spread of hours and split pay.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Will agencies need to negotiate the increase with their unions?<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Those questions are important but beyond the scope of this article. You can <\/span><a href=\"https:\/\/www.nyshcp.org\/ItemDetail?iProductCode=CD_WAGEINCR_DL&amp;Category=LEGAL&amp;WebsiteKey=3b1358d2-2751-4153-b946-11722916bae5\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">access the full recording here<\/span><\/a><span style=\"font-weight: 400;\">. Pertinent to us are the ramifications for <\/span><a href=\"https:\/\/melodybenefits.com\/make-ny-wage-parity-laws-work-for-you\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">wage parity<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><b>Wage parity and benefits can help agencies mitigate the cost of the wage increase.<\/b><span style=\"font-weight: 400;\"> Let\u2019s take an in-depth look at the law\u2019s financial implications to understand how.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><b>DISCLAIMER:<\/b> <i><span style=\"font-weight: 400;\">What follows is an expert interpretation of the law based on the presentation. However, many details haven\u2019t yet been clarified by the Department of Health (DOH.) Please discuss all questions with your counsel to avoid unpleasant fines, <\/span><\/i><a href=\"https:\/\/melodybenefits.com\/home_healthcare_audits_surveys\/\" target=\"_blank\" rel=\"noopener\"><i><span style=\"font-weight: 400;\">audits<\/span><\/i><\/a><i><span style=\"font-weight: 400;\">, or lawsuits.<\/span><\/i><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">When $2 isn\u2019t $2<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The wage increase is codified in NYS law as the \u201cPublic Health Law \u00a73614-f: Home Care Minimum Wage Increase.\u201d<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">That language is significant. Pre-October, these were the wage requirements for home healthcare aides (HHAs):<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Base Pay<\/span><\/p>\n<p><span style=\"font-weight: 400;\">(per hour)<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Required Wage Parity Benefits<\/span><\/p>\n<p><span style=\"font-weight: 400;\">(per hour)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">New York City<\/span><\/td>\n<td><span style=\"font-weight: 400;\">$15<\/span><\/td>\n<td><span style=\"font-weight: 400;\">$4.09<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Nassau, Suffolk &amp; Westchester counties<\/span><\/td>\n<td><span style=\"font-weight: 400;\">$15<\/span><\/td>\n<td><span style=\"font-weight: 400;\">$3.22<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Wage parity is 100% mandatory and, since the\u00a0 <\/span><a href=\"https:\/\/www.budget.ny.gov\/pubs\/archive\/fy21\/exec\/index.html\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">20-21 New York State Budget<\/span><\/a><span style=\"font-weight: 400;\">, comes with fines and criminal penalties for non-compliance. However, when paid as benefits, it\u2019s not part of the base wage and isn\u2019t calculated into payroll taxes or overtime. (This is why paying <\/span><a href=\"https:\/\/melodybenefits.com\/cash-in-lieu-of-wage-parity-benefits-5-reason-not-to\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">cash in lieu of benefits<\/span><\/a><span style=\"font-weight: 400;\"> is always more expensive for an agency.)<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The Home Care Worker Wage Increase seems to be a minimum wage increase, changing the chart to this:<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><\/td>\n<td><span style=\"font-weight: 400;\">Base Pay<\/span><\/p>\n<p><span style=\"font-weight: 400;\">(per hour)<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Required Wage Parity Benefits<\/span><\/p>\n<p><span style=\"font-weight: 400;\">(per hour)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">New York City<\/span><\/td>\n<td><span style=\"font-weight: 400;\">$17<\/span><\/td>\n<td><span style=\"font-weight: 400;\">$4.09<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Nassau, Suffolk &amp; Westchester counties<\/span><\/td>\n<td><span style=\"font-weight: 400;\">$17<\/span><\/td>\n<td><span style=\"font-weight: 400;\">$3.22<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">In other words, home healthcare workers now have their own unique minimum wage in New York. And post-October 1st, payroll taxes, overtime, PTO, and more must be paid using $17 as the baseline.<\/span><\/p>\n<p><b>Considering those costs, the $2\/hr increase is effectively much more than $2.\u00a0<\/b><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Based on survey data, Laura Ehrich, VP of Public Policy at HCP, estimated the average actual expense to be $2.66 for downstate and $2.77 for upstate. Those are just estimates, of course, but the implications are clear.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Where\u2019s the funding?<\/span><\/h2>\n<p><b>\u201cWill we be fully reimbursed by our plans?\u201d<\/b><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Given the prohibitive costs of the wage increase, that\u2019s the question on every agency\u2019s mind. And no one knows the answer yet.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The chain of funding for Medicaid home health services goes from<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><a href=\"https:\/\/www.cms.gov\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Centers for Medicare &amp; Medicaid Services (CMS)<\/span><\/a><span style=\"font-weight: 400;\">\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To New York State\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To Managed Long Term Care Plans (<\/span><a href=\"https:\/\/www.health.ny.gov\/health_care\/managed_care\/mltc\/#:~:text=Managed%20long%2Dterm%20care%20(MLTC,in%20their%20homes%20and%20communities.\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">MLTCP<\/span><\/a><span style=\"font-weight: 400;\">s)\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To home health care agencies.\u00a0<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The recent <\/span><a href=\"https:\/\/melodybenefits.com\/newyork_hcbs_efmap\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">eFMAP<\/span><\/a><span style=\"font-weight: 400;\"> awards, for example, began with the CMS and went down the chain to the Licensed Home Care Services Agencies (LHCSAs). NYS initiated the current Healthcare Workers\u2019 Bonus, but it only became law subject to federal funding approval.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Not so the October wage increase. New York State passed the law <\/span><span style=\"font-weight: 400;\">without<\/span><span style=\"font-weight: 400;\"> making it dependent on federal funding. And in fact, NY State hasn\u2019t yet received funding from the CMS.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The plans, therefore, haven\u2019t yet received funding from NYS, although they met in August to negotiate their premiums. And if the plans don\u2019t have the money, they can\u2019t pay it yet to the agencies.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Regardless, the agencies have to pay aides the extra $2\/hr come October 1st. How will they cover the expense until they get reimbursed?\u00a0 Some agencies are taking out a line of credit.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Others are using their<\/span><a href=\"https:\/\/melodybenefits.com\/newyork_hcbs_efmap\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\"> eFMAP<\/span><\/a><span style=\"font-weight: 400;\"> money. While this isn\u2019t an approved expense for eFMAP, agencies are using it as a bridge loan until the other funds come through. Of course, they\u2019ll have to \u201cpay back\u201d their eFMAP fund and use that money for an approved purpose by March 31, 2023.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">All of the above applies to Medicaid-paid services. However, private-pay services are equally obligated by this wage increase. How will agencies pay? Will they pass on the entire cost increase to their clients? Many clients can\u2019t afford it.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Laura Ehrich, VP of Public Policy at HCP, explained that HCP is lobbying intensely for funding on this issue, specifically, and the Home Care Worker Wage Increase in general. She encouraged all concerned agencies to get involved and contact their legislators.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Negotiating a rate<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The delay in funding is bad enough. But even worse for agencies is that the wage increase isn\u2019t a directed payment. That means the DOH didn\u2019t mandate the minimum payment rates from the plans to the agencies.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Instead, agencies will individually negotiate rates with their plans. The DOH only directed the MLTCPs to ensure that LHCSAs are \u201csufficiently funded\u201d and said they expect \u201cgood faith\u201d negotiations.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">But \u201csufficient funds\u201d are wide open to interpretation. As we explained above, the exact cost of the wage increase isn\u2019t clear and can change from agency to agency. \u201cBe proactive,\u201d recommends Emina to agencies. \u201cIt\u2019s on you to secure your rate. Get with your CFO to figure out your true rate and initiate negotiations with your plans, coming with your numbers in hand.\u201d<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Negotiating a fair rate won\u2019t change the reality of the plans not yet having the funds to pay you. However, it ensures that you\u2019ll get the money once it\u2019s there.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Wage parity and benefits<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">How can <\/span><a href=\"https:\/\/melodybenefits.com\/5-biggest-wage-parity-mistakes\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">wage parity<\/span><\/a><span style=\"font-weight: 400;\"> help? <\/span><b>To be clear, wage parity or benefits can NOT be used to pay the $2 increase.<\/b><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">For example, if Agency A is currently paying $15 in base pay and $4.09 in wage parity benefits, it can NOT now pay $15 in base pay and $6.09 in benefits. Base pay must be $17 or more.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">But what about Agency B, who\u2019s currently paying $17 in base pay and $2.09 in benefits?\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">First, Emina clarified that Agency B is still affected by the wage increase. \u201cThere\u2019s a misconception that an agency isn\u2019t affected if it\u2019s already paying $2 or more above minimum wage,\u201d she says. \u201cBut that\u2019s not true. Everyone must raise their rates.\u201d\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Still, Agency B has some wiggle room with their $2. It could simply pay $19 in cash wages and $2.09 in wage parity. But since it\u2019s already paying $17 in base pay, it can use the opportunity to increase its benefits instead. The agency could, for example, pay $17 in cash wages and $4.09 in benefits, or it could pay $18 in cash wages and $3.09 in benefits.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Compensating employees in benefits offers multiple advantages to employers:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Payroll taxes, such as FICA, worker\u2019s comp, unemployment taxes, and more apply to every dollar you pay your employees. They don\u2019t apply to most benefits.\u00a0<\/span><\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Average payroll taxes are 15%, so if you pay $2 as benefits instead of cash wages, you save $.30\/hr. What\u2019s thirty cents? Multiply it by an employee\u2019s average annual 1560 hours, and you get $468 saved per employee per year!<\/span><\/p>\n<p>&nbsp;<\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Agencies must pay overtime to aides who work more than 40 hours a week. <\/span><span style=\"font-weight: 400;\">Overtime is paid at time and a half of an employee\u2019s cash wages, but benefits aren\u2019t added to the calculation. For Agency B in our example above, if it raises cash wages to $19, overtime is now $28.50. If it gives $2 extra in benefits, overtime is only $25.50, a $3\/hr savings that add up quickly.<\/span><\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/melodybenefits.com\/empowering-employees-to-maximize-wage-parity-benefits\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Employees love benefits<\/span><\/a><span style=\"font-weight: 400;\"> because they\u2019re pre-tax and, therefore, don\u2019t add to an employee\u2019s reportable income. HHAs often qualify for Medicaid, food stamps, and other income-based government programs. They prefer to report less income and keep their eligibility for these programs.\u00a0<\/span><\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">\u201c<\/span><b>Paying wages in benefits instead of cash can save an agency thousands or even hundreds of thousands of dollars<\/b><span style=\"font-weight: 400;\">,\u201d says Shaya Sternhill, Melody\u2019s Head of Marketing and Business Development. \u201cWith agencies facing a cash crunch in October, those savings are more important than ever.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">\u201cPlus, <\/span><a href=\"https:\/\/melodybenefits.com\/top-3-wage-parity-benefits\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">benefits make employees happy<\/span><\/a><span style=\"font-weight: 400;\"> and lead to better recruitment and retention.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">\u201cBe in touch to discuss which benefits are the right fit for your agency. We\u2019re here to help.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Worried about the NY Home Care Worker Wage Increase? Scared for your bottom line? Learn how wage parity benefits can save you thousands in overtime and taxes.<\/p>\n","protected":false},"author":1,"featured_media":5622,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":"","_vp_format_video_url":"","_vp_image_focal_point":[]},"categories":[15],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>NY Home Care Worker Wage Increase: Save Thousands with Wage Parity<\/title>\n<meta name=\"description\" content=\"Worried about the NY Home Care Worker Wage Increase? 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