Original article written by Mark S. Goldstein, Alexandra Manfredi, and Veronica A. Miclot for Lexology.
On August 3, 2022, New York Governor Kathy Hochul announced the implementation of New York’s Health Care and Mental Hygiene Worker Bonus Program (the Bonus Program). The Bonus Program, passed as part of the State budget, amends New York Social Services Law by requiring qualified employers to pay up to $3,000 in bonuses to certain health care and mental hygiene workers over statutory vesting periods. This post details the eligibility, qualifications, and employer obligations under the Bonus Program.
Which employers and employees are subject to the Bonus Program?
A qualified employer is an employer with at least one employee that either: (i) bills under the state Medicaid plan; (ii) bills under the home or community-based services waiver; or (iii) bills for Medicaid through a managed care organization or managed long term care plan. Providers, facilities, pharmacies, and school-based health centers licensed under the New York Public Health, Mental Hygiene, and Education Laws, as well as certain state agency funded programs, fall within this definition.
“Front-line” health care and mental hygiene workers who “provide hands-on health or care services to individuals” are eligible to receive the bonus. This includes full-time and part-time employees and independent contractors who are physically present in New York. To qualify for a bonus under the program, an employee must also: (i) earn less than $125,000 annually; (ii) remain employed by a qualified employer for the duration of at least one vesting period (which the New York State Department of Health (NYSDOH) has established is six months); (iii) have a title included on the list of Eligible Worker Titles published by the NYSDOH; and (iv) not have been suspended or excluded from the Medicaid program during the vesting period.
The NYSDOH further clarified in a Town hall meeting that employees who work remotely, but serve in patient-facing roles such as telehealth nurses and social workers, are also considered eligible employees, provided that they meet the criteria outlined above.
What are employer obligations under the Bonus Program?
The bonus amount is based on the number of hours worked by an eligible employee during certain vesting periods. The NYSDOH has provided a schedule of five six-month vesting periods from October 1, 2021 to October 1, 2023. Although an employee’s bonus amount is based upon the number of hours worked by the employee, the maximum bonus an employee can receive during any one vesting period is $1,500. When calculating an eligible employee’s hours, the use of accruals or leave time, including leave under the federal Family Medical Leave Act, may be credited towards the hours of work required for a vesting period. However, employees are only eligible for up to two vesting periods per employer. In other words, eligible employees have the opportunity to earn a maximum of $3,000 in bonuses per employer under the Bonus Program.
Employers may receive reimbursement for the bonuses from the State if they submit claims for reimbursement in accordance with NYSDOH guidelines. Employers are required to pay out the bonuses within 30 days of their receipt of the bonus payment from the State. Employers have no obligation to pay bonus payments before receiving said funds from the State. Qualified employers are responsible for determining an employee’s eligibility to receive a bonus and tracking the hours worked by eligible employees during the vesting period. Employers must also retain records and documents substantiating the bonuses for at least six years.
Employers who may be considered qualified employers for the purposes of the Bonus Program should familiarize themselves with the requirements of this new law, determine which employees may qualify for a bonus, and prepare appropriate policies and practices with respect to bonus issuance, the vesting periods, reimbursement requirements, and recordkeeping obligations. Employer submissions for the first vesting period were due on September 2, 2022.
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