On April 3, 2020, New York Governor Andrew Cuomo signed the 2020-2021 state budget bills, part of which amended the Home Health Care Worker Wage Parity Law (“Wage Parity Law”).  The Wage Parity Law establishes a minimum wage rate, additional wages and supplemental benefits for home care aides who perform Medicaid-reimbursed work within New York City and the counties of Nassau, Suffolk and Westchester. In addition to the minimum wage, in New York City the employer must pay a total of $4.09 per hour and in Westchester, Nassau and Suffolk counties, $3.22 per hour, in a combination of additional wages and/or supplemental benefits, which remains unchanged.  The amendments affect home health care agencies and the aides that perform Medicaid-reimbursed work, in several meaningful ways.

Restrictions on Distribution of Funds

The amendments require that no portion of the funds spent or to be spent to satisfy the additional wage or supplemental benefit portion required pursuant to the Wage Parity Law may be returned, whether as a refund, dividend or profit, to the certified home health agency (CHHA), licensed home care services agency (LHCSA), long term home health care program (LTHHCP), managed care plan (MCP) or fiscal intermediary (FI),¹ or related persons or entities, other than to a home care aide to whom the benefits are due.  Although a set of frequently asked questions (FAQs) the state Department of Health issued in February 2012 mentioned “refunds” and “dividends” of employer contributions to a benefits plan, the Wage Parity Law itself did not until this amendment.

Certification Required

If a CHHA, LTHHCP or MCP chooses to provide home care aide services through contracts with an LHCSA, FI or through other third parties, any such contract must include a requirement that the CHHA, LTHHCP or MCP be provided with an annual, written certification, verified under oath regarding compliance with applicable rules.  Pursuant to the new amendments, in this certification the LHCSA, FI or other third party must not only attest to compliance with the requirement that they provide the CHHA, LTHHCP or MCP with the information necessary to verify compliance with the Wage Parity Law, but also provide for an annual compliance statement of wage parity hours and expenses on a form provided by the New York Department of Labor (NYDOL), accompanied by an independently-audited financial statement.

The information obtained from the LHCSA, FI or other third party must be retained by the CHHA, LTHHCP or MCP for at least 10 years and must be made available to the NYDOL upon request.  Further, if an LHCSA, FI or other third party knowingly verifies, under oath, any false statement, the LHCSA, FI or other third party will be guilty of perjury and subject to criminal penalties.

Finally, the CHHA, LTHHCP or MCP is required to review and assess the annual compliance statement of wage parity hours and expenses and make a written referral to the NYDOL for any reasonably suspected failures of LHCSAs, FIs or other third parties to comply with the wage parity requirements.

Penalties for Violations

The amendments impose penalties for any CHHAs, LHCSAs, LTHHCPs, MCPs, FIs or other third parties that violate the Wage Parity Law by willfully paying their workers less than the “stipulated minimums regarding wages and supplements.”  The penalties are as follows:

• First offense – Fine of $500; imprisonment for not more than 30 days; or both

• Second offense – Fine of $1,000, and the contract on which the violation occurred shall be forfeited, as well as all payments under that contract

Notice Requirements

The amendments require home care agencies to provide additional information on a home care worker’s Notice of Pay Rate and weekly wage statements normally required pursuant to the Wage Theft Prevention Act.  The amendments now require employers to include the benefit portion of the minimum rate of home care aide total compensation on the Notice and weekly wage statement.  Further, when home care aide benefits are provided, the home care agencies must provide the type of such benefits, including, but not limited to, pension or healthcare, as well as the name and address of the person or entity providing such home care aide benefits.  This requirement goes into effect October 1, 2020.

Conclusion

These amendments have resulted in many significant changes that will substantially affect home health care agencies. Agencies should be cognizant of the new requirements and reach out to employment counsel with questions regarding these requirements, including how to best ensure compliance, as wage parity compliance has become, and will remain, an area that many governmental agencies are enforcing vigorously.