?On Aug. 3, New York Gov. Kathy Hochul announced the $1.2 billion dollar Health Care and Mental Hygiene Worker Bonus Program, aimed at rewarding and retaining frontline healthcare and mental hygiene workers.
Passed as part of the state budget, this program requires health care providers to pay up to $3,000 in bonuses to health care and mental hygiene practitioners, technicians, assistants, support staff, and aides.
The State Department of Health (DOH) launched a website with guidance aimed at implementing the program, with the first deadline for employers’ submissions coming up quickly on Sept. 2.
Qualified Employers
Qualified employers are employers that:
- bill under the state Medicaid plan,
- bill under the home or community-based services (HCBS) waiver, or
- bill for Medicaid through a managed care organization or managed long term care plan.
This definition includes providers, facilities, pharmacies, and school-based health centers licensed under the Public Health Law, Mental Hygiene Law and Educational Law, as well as certain programs funded by state agencies.
Eligible Employees
Full-time and part-time employees, as well as independent contractors, may be eligible for the bonus. It’s available to workers who are front-line health care and mental hygiene practitioners, technicians, assistants and aides that provide hands-on health or care services to individuals.
To be qualified, workers must:
- be continuously employed by a qualified employer for the duration of at least one vesting period;
- have a title on the list of titles from the legislation and the DOH;
- have an annual base salary (excluding overtime and bonuses) not exceeding $125,000 per year; and
- not be suspended or excluded from Medicaid during the vesting period or when the payment is made.
The legislation lists eligible worker titles and authorizes the DOH to determine additional titles. DOH guidance explains that workers must support the provision of patient-facing care provided within a patient care unit of a hospital or other institutional medical setting in support of treating and caring for patients.
Homecare aides, home health aides, personal care assistants and homemakers are not eligible for the bonus because the state already enacted a $2.00 per hour wage increase that goes into effect on Oct. 1 for such workers and will add another $1.00 per hour next year. Some home health agencies may employ eligible titles like nurses, physical therapists, occupational therapists, or speech pathologists.
Bonus Entitlements
Bonuses are set based upon the number of hours worked by the employee for the vesting period at issue. The maximum bonus an employee can receive in any vesting period is $1,500. Employees are eligible for up to two vesting periods per employer and may receive up to $3,000 under the program. For each vesting period, employees are entitled payments based on the following:
- Non-exempt employees who work 20 to 30 hours a week for the vesting period are entitled to a $500 bonus for the vesting period.
- Non-exempt employees who work 30 to 35 hours per week receive a $1,000 bonus for the vesting period.
- Non-exempt employees who work 35 or more hours receive a $1,500 bonus for the vesting period.
- Full-time exempt employees receive a $1,500 bonus for the vesting period.
Use of leave time can be credited toward an employee’s work hours for a vesting period.
Employees can sign an attestation form that confirms their eligibility under the program. Employees cannot file a claim for a bonus payment from the state. Rather, the administration and payment of bonuses is to be handled exclusively by qualified employers.
Tax and Other Ramifications
Bonuses cannot be used to reduce any portion of wages otherwise due to an employee under applicable law, including the Wage Parity Law or the Labor Law, or a collective bargaining agreement.
Bonuses are taxable at the federal level and should be included in employees’ IRS Form W-2s. Such bonuses are not considered income at the state and local level. Bonuses are not considered income for public assistance and benefits programs.
Left unaddressed by the statute and thus far in the guidance is how such bonuses can or must be treated for the purposes of overtime, which generally must include non-discretionary bonuses in the calculation of an employee’s regular rate of pay that is used to calculate overtime rates of pay.
Employer Requirements
Employers are responsible for determining if employees are eligible. Failure to identify, claim and/or pay more than 10 percent of eligible employees may result in enforcement actions.
The law directs employers to track hours worked by eligible employees throughout the vesting periods and to submit claims for reimbursement of employee bonus payments through the online portal for bonuses in accordance with the schedule established by the DOH.
Bonuses must be paid to employees within 30 days of the employer’s receipt of the bonus payment. There is no obligation under the program for employers to pay bonuses to employees before receipt of payment from the state.
Employers must keep records of hours of eligible employees, and documents to substantiate bonus claims, for at least six years. Employers also must make information used for determining employee eligibility available to pertinent regulatory agencies.
The DOH and the Medicaid Inspector General are tasked with audits of employers, and any improperly paid claims under the bonus program will be treated as Medicaid overpayments. Violations or failures under the Health Care Worker Bonus Program are subject to sanctions and penalties where the employer:
- Claims a bonus not due to an employee under the program’s requirements.
- Makes a claim for an incorrect amount.
- Claims and receives a bonus, but fails to pay it.
- Fails to claim a bonus due to an employee.
Employers in such situations can be subject to penalties of $1,000 per violation. Employers that fail to pay more than 10 percent of eligible workers may be subject to additional penalties and sanctions under the Public Health Law. Employers cannot recover any bonuses paid out to employees where the claims are found by the state to be improper.
Employer Takeaways
While additional guidance is expected, given the forthcoming Sept. 2 submission deadline in connection with the first vesting period, employers should begin ascertaining eligible worker titles in their operations and tracking hours worked during the vesting period to determine bonus entitlements.
Employers also should familiarize themselves with required attestation forms and plan on how to communicate with employees about the criteria for bonuses and the need for signed attestation forms.
Michael Paglialonga and Jason R. Stanevich are attorneys with Littler in New York City. Ira D. Wincott and Sanjay V. Nair are attorneys with Littler in Long Island, N.Y. © 2022. All rights reserved. Reprinted with permission.
