June 29, 2017

Wage Parity Compensation Requirements Now Applicable to CDPAS Personal Assistants

4 min

Pursuant to updates in the recent New York State budget, "Personal Assistants" providing Consumer Directed Personal Assistance Services (CDPAS) will now be included in the definition of the term "home care aide" for purposes of New York State's Home Care Worker Wage Parity Law (the Wage Parity Law or Wage Parity). Further, CDPAS fiscal intermediaries that have executed Administrative Agreements with Managed Care Organizations (MCOs) will be required to verify to the MCO on a quarterly basis that they are in compliance with the Wage Parity Law. See New York State Department of Health, Dear Administrator Letter, June 14, 2017. These substantial changes will go into effect on July 1, 2017, giving CDPAS fiscal intermediaries little time to ensure compliance.

Background: The Wage Parity Law

The Wage Parity Law sets certain minimum hourly compensation thresholds for home care aides employed in parts of New York State. These thresholds vary depending upon the size and location of the particular employer. Generally speaking, the required compensation threshold is comprised of a "base wage" component and a "supplemental wage" component. The "base wage" is the portion of the individual’s hourly compensation that must be paid as actual monetary wages in exchange for time worked, whereas the "supplemental wage" requirement is the portion of the individual’s hourly compensation that may be satisfied indirectly, for example, by providing pension benefits, educational benefits, or health insurance. Alternatively, an employer can satisfy the "supplemental wage" requirement by offering additional monetary wages. For home health aides in New York City, the total hourly compensation also contains an "additional wages" component, which employers may satisfy through items such as paid leave and pay differentials for certain shifts or assignments. As with "supplemental wages," the "additional wages" component can be satisfied via additional monetary payment.

The 2017 total compensation threshold for large employers in New York City (i.e., employers with 11 or more employees) is $15.09, consisting of at least $11.00 in base wages, $1.69 in additional wages, and $2.40 in supplemental wages. For large employers in Westchester, Suffolk, and Nassau Counties, the total compensation threshold for 2017 is $13.22, consisting of at least $10.00 in base wages, and $3.22 in supplemental wages.

Effect of the New Requirements on CDPAS Fiscal Intermediaries

Personal Assistants in the CDPAS program are individuals directly hired by consumers, i.e., patients, to provide care through Medicaid-funded self-directed programs. As Personal Assistants in the CDPAS program are now considered "home health aides" for purposes of the Wage Parity Law’s compensation requirements, such individuals must be paid accordingly. While this requirement may appear simple on its face, in fact it introduces a range of considerations. For example, while employers of traditional home care aides may choose to satisfy the supplemental wage or, as applicable, additional wage component of the Wage Parity compensation requirement by way of employee benefit programs and leave entitlements, extending such benefits to CDPAS Personal Assistants may suggest that fiscal intermediaries are the "employers" of such Personal Assistants. Further, there may be legal ramifications – or, in fact, violations – attendant to extending certain benefits to non-employee Personal Assistants. While these issues may suggest that Wage Parity compliance should simply be accomplished by paying the entire required compensation amount in "cash," such a step may carry with it financial implications, including implications pertaining to overtime payment obligations.

Moreover, as noted above, CDPAS fiscal intermediaries will now be required to submit to the MCO on a quarterly basis a standardized "certificate of compliance" form, attesting that they are in compliance with the Wage Parity Law. If a CDPAS fiscal intermediary fails to comply with the Wage Parity Law, the CDPAS fiscal intermediary may not receive governmental reimbursement in connection with the care rendered by Personal Assistants. Additionally, as with the underlying requirement that fiscal intermediaries participate in Wage Parity compliance relative to the compensation of Personal Assistants, the submission of compliance certifications would similarly appear to have implications relative to the "non-employer" status of fiscal intermediary entities.

Ultimately, while the new CDPAS/Wage Parity requirements may seem straightforward on their face, implementing them in a manner that is consistent with the appropriate role of the fiscal intermediary may, in fact, be a more complex undertaking. In order to address such issues or any other questions you may have about the Home Care Worker Wage Parity Law or its effect on CDPAS entities, please contact a member of Venable's Labor & Employment team.