New York’s Home Care Wage Parity Law is changing — and it could mean more costs… or maybe more savings. Discover the latest hourly rates, benefit rules, and compliance requirements every agency and every home care worker should know. Stay ahead of the 2024–2026 wage increases and make sure they don’t catch you by surprise.
What is New York Wage Parity?
In 2012, The Wage Parity Law established a minimum wage rate for home care workers who perform Medicaid-reimbursed work within New York City, the boroughs and the counties of Nassau, Suffolk and Westchester. The law also establishes a specific amount of compensation can be applied towards additional wages and supplemental benefits. Wage Parity benefits are paid to participants are tax-free.
There have been several “phased-in” rate changes over the years. As of 2024 the following rates apply:
. New York City: $18.55 hourly + $2.54 Benefit Portion = Total: $21.09/hour
. Nassau, Suffolk, and Westchester: $18.55 hourly + $1.67 Benefit Portion = $20.22/hour
. Remainder of New York State $17.55 hourly — Total: $17.55/hour (no additional parity).
Wage Parity Definitions
Total Compensation:
May be satisfied entirely through wages, or through a combination of wages, additional wages and supplemental wages, with the following limitations:
Base Wage: is the minimum amount of the Total Compensation that must be paid directly to workers as regular hourly wages for all hours worked.
Additional Wages:
The Additional Wage portion (Parity) can also be satisfied either directly, by increasing the Base Wage rate, or indirectly, by increasing the Supplemental Wage rate. Additional wages are identified as the Total Compensation that employers may satisfy through additional payments directly to workers for hours not worked such as paid leave, vacation, holiday, sick and personal days and so on.
Additional Wages do not include overtime compensation or extra compensation for hours worked in excess of normal, regular or maximum daily or weekly hours.
Supplemental Wages:
The New York State Department of Health defines supplemental wages as: the maximum amount of Total Compensation that employers may satisfy indirectly, for example, by providing health insurance required by federal law.
Who is Eligible for Wage Parity?
Wage Parity benefits are available to all hourly home care workers or aides who are employed by agencies located in New York City (including Bronx, Kings, Queens and Richmond Counties), Nassau, Suffolk, or Westchester.
If you operate a home care agency in New York, it’s important to know whether you must follow the Wage Parity Law. The law applies to:
Certified Home Health Agencies (CHHAs)
Long Term Home Health Care Programs (LTHHCPs)
Managed Care Organizations (MCOs)
Licensed Home Care Services Agencies (LHCSAs)
Limited License Home Care Service Agencies (LLHCSAs)
How Wage Parity Benefits Help Home Care Workers
If your employer provides Wage Parity through a benefits program instead of extra cash in your paycheck, you actually keep more of it. Your benefits are usually tax-free – meaning you don’t lose part of it to taxes.
Since employers also save on payroll taxes, it makes it easier for them to continue offering you benefits.
Most importantly, more value goes into your pocket through health, dental, vision, or retirement benefits.
What Supplemental Benefits Are Available?
Flexible Spending Account (FSA)
A flexible spending account, or FSA, is an account that allows participants to contribute pre-tax money to pay for un-reimbursed medical, dental and vision expenses. Employers can contribute $500 per year to each participant’s FSA account.
Employers can allow participants to contribute up to an additional $3,300 if desired via a pre‐tax payroll deduction. Unlike traditional FSA accounts these funds can be rolled over to the following year giving your healthcare workers more flexibility.
Dental and Vision Health Reimbursement Account (HRA)
Employers contribute into this account to help participants to pay for their out‐of‐pocket dental and vision care expenses. There is no limit to what an employer can contribute this this account. Left-over funds can be rolled over to the following year.
Transit Reimbursement Account (TRN)
This benefit reimburses participants for travel to work and job sites.
Employers can reimburse up to $150 per transaction, with a total annual limit of $1,800.
Eligible Expenses: Funds can be used to pay for work-related commuting expenses, including public transportation fares, either in-person or online.
Tax Advantages: This benefit is typically tax-free for employees and can reduce payroll taxes for employers.
Dependent Care Reimbursement (DCAP)
This benefit is typically tax-free for employees and can reduce payroll taxes for employers. Employers can contribute up to $500 per year to each participant’s DCAP account. Employees can contribute up to an additional $2,700 per year via pre-tax payroll deductions. Unlike traditional DCAPs, these funds can be rolled over to the following year.
Cell Phone Reimbursement Account
If cell phones are used for work related communications, employers can reimburse up to $150 per month with an annual limit of $1,800 to pay for employee’s cell phone bill.
Why Should Employers Provide Wage Parity Through Benefits?
Tax Savings:
When employers fund the supplemental wage portion through a benefits program instead of direct cash wages, both the employer and employees can gain significant tax advantages.
Wage Parity benefits provided as part of a plan are generally tax-free for employees
Employers see a reduction in payroll taxes
Overall, this approach helps stretch every dollar further
Wage Parity Experts
At HealthPlansNY we work with some of the leading health care benefit providers in the tri-state area and our benefit solutions will help your business save money while staying compliant. For more information on how our expertise in this field can help your agency, contact us or call: 914-633-1717.
