Wage Parity For Home Care Workers
Wage parity for home health care workers is mandatory, but losing money is not. Here’s how your agency can profit from the law.
Wage Parity Law New York – Background
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 and as of 2020, a New York City employer must pay a total compensation of $19.09 per hour to their health care workers, with $4.09 going towards additional wages or supplemental benefits.
In Westchester, Nassau and Suffolk counties, the total compensation to be paid to health care workers is $17.22 per hour which $3.22 can be applied towards additional wages and benefits. In 2021, the base rate in these counties increases to $15.00. The rate for additional wages and/or supplemental benefits, remains unchanged at $3.22. See chart below:
Wage Parity Definitions
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.
The Additional Wage portion 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.
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.
The following home care agencies must comply with The New York Wage Parity Law:
• Certified Home Health Agency (CHHA)
• Long Term Home Health Care Program (LTHHCP)
• Managed Care Organizations (MCO)
• Licensed Home Care Services Agency (LHCSA)
• Limited License Home Care Service Agency (LLHCSA)
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 $2,700 if desired via a pre‐tax payroll deduction. Unlike traditional FSA accounts these funds can be rolled over to the following year.
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 contribute up to $265 per month for mass transit, car service and an additional $265 per month for work related parking.
Dependent Care Reimbursement (DCAP)
This benefit helps participants pay for eligible childcare and adult day care. Employers can contribute up to $5,000 per year.
Cell Phone Reimbursement Account
If cell phones are used for work related communications, employers can reimburse up to $100 per month to pay for employee’s cell phone bill.
What Are The Benefits Of An Employer Providing Wage Parity?
Employers who choose to fund the supplemental wages in the form of a benefits program, rather than direct compensation, will likely benefit from the tax advantages. Wage Parity Benefits that are paid to the participant are tax-Free and employers see a reduction in payroll taxes. See the example below:
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.