We have been hearing for months about New York State making certain bonuses available to direct healthcare workers of up to $3,000 each. Governor Hochul allocated $1.2 billion from the State’s 2022/23 budget for the Healthcare Worker Bonus program (“HWB”) and the State has finally released the regulations surrounding these bonuses.
The State understands the immense value that direct care workers bring to the table and how they went above and beyond during the pandemic. As a result, the State, in conjunction with the federal government, has made available funds to pay bonuses to direct healthcare workers in order to effectively allow providers to attract, recruit, and retain healthcare and mental hygiene workers. It is the responsibility of each employer to evaluate and attest to whether they and/or any of their employees meet the eligibility criteria. Failure to do so can result in penalties to employers.
Qualified Employers: Qualified employers include certain providers with at least one employee, and that bill for services under the Medicaid state plan or a home or community-based services (HCBS) waiver, providers that have a provider agreement to bill for Medicaid services provided or arranged through a managed care organization or a managed long term care plan, and certain educational institutions and other funded programs (including early intervention programs). These include certain providers, facilities, pharmacies, and school-based health centers licensed under the state Public Health Law, Mental Hygiene Law, and Education Law, as well as certain programs funded by the Office of Mental Health (OMH), Office for the Aging, Office of Addiction Services and Supports (OASAS), and the Office for People with Developmental Disabilities (OPWDD).
The bonus claim process requires all qualified employers to electronically sign an attestation that acknowledges they understand and have determined that each employee the employer included in the claiming process is eligible to receive the HWB. Those requirements are found in section 367-w of the Social Services Law, and other guidance pertaining to the HWB. Qualified employers must download a copy of the HWB Employer Attestation, which can also be found on the HWB Program Portal.
Qualified Employees: Pursuant to the regulations, an “employee” means certain front line health care and mental hygiene practitioners, technicians, assistants, and aides that provide hands-on health or care services to individuals, without regard to whether the person works full-time, part-time, on a salaried, hourly, or temporary basis, or as an independent contractor, that received an annualized base salary of $125,000 or less (exclusive of any bonus or overtime pay). For purposes of determining an employee’s eligibility, see the State regulations linked above for a complete description.
Vesting Period: In order to be eligible for an HWB, an employee must work continuously for an employer over a six-month vesting period. There are five such periods, as follows:
10/1/21 to 3/31/22
4/1/22 to 9/30/22
10/1/22 to 3/31/23
4/1/23 to 9/30/23
10/1/23 to 3/31/24
Employers are required to pay staff bonuses based upon hours worked within each vesting period, inclusive of PTO and FMLA hours paid. The bonuses are calculated as follows:
- If an employee works an average of twenty to thirty hours per week during a six-month vesting period, they are entitled to a $500 bonus for that vesting period.
- If an employee works an average of thirty to thirty-five hours per week during a six-month vesting period, they are entitled to a $1,000 bonus for that vesting period.
- If an employee works an average of thirty-five hours per week or more, or is a full-time exempt employee, during a six-month vesting period, they are entitled to a $1,500 bonus for that vesting period.
Employees are allowed bonuses for no more than two vesting periods per employer up to a maximum of $3,000 across all employers. Employers must submit a claim to the State for employee bonuses within thirty days of the dates the employees’ bonuses vest, and bonuses must be paid by the employer within thirty days of receiving the bonuses from the State. If employees leave prior to the dates bonuses must mandatorily be paid (or are paid within the statutes), they forfeit their rights to such bonuses, and the bonuses should be returned to the State.
Penalties and Regulatory Concerns: The OMIG will be performing audits, investigations, and reviews of employers to determine that the bonuses were properly calculated and distributed to eligible staff.
- Penalties (of up to $1,000 per incident) can arise even if an employer failed to claim a bonus for an employee that was eligible to receive such bonus.
- If the OMIG identifies errors of more than 10% of the entire eligible bonus, there will be additional sanctions charged against the employer.
- Inappropriately paid bouses to employees can be recouped by the OMIG and the employer cannot recoup such bonus funds from the employees they were paid to.
Taxability of Bonuses: Bonuses are not subject to State or local income tax and are not included in compensation for purposes of calculation of public benefits or assistance.
The regulations surrounding the HWB program can be confusing, especially with respect to eligibility, tracking of transient employees, what constitutes an eligible employer, and more. The State has issued a series of frequently asked questions to assist employers. The stakes of getting this wrong can be steep, because unlike many other programs, this program is not optional, and eligible employers must participate in this program to avoid facing penalties. As always, please feel free to reach out with questions, but also understand that the ultimate responsibility for compliance with this program rest with you.
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Kenneth R. Cerini, CPA, CFP, FABFA
Ken is the Managing Partner of Cerini & Associates, LLP and is the executive responsible for the administration of our not-for-profit and educational provider practice groups. In addition to his extensive audit experience, Ken has been directly involved in providing consulting services for nonprofits and educational facilities of all sizes throughout New York State in such areas as cost reporting, financial analysis, Medicaid compliance, government audit representation, rate maximization, board training, budgeting and forecasting, and more.
Edward McWilliams, CPA
Ed is a Partner in the firm’s tax and business advisory practice focusing on providing services to middle market private companies across different industries as well as to early stage startups. Ed has over a decade of experience providing tax and business consulting services to these companies of different sizes and across different industries, bringing a broad and diverse knowledge base and strategic solutions to the many complex issues that businesses face.