In early August, the New York State Department of Health announced the New York Healthcare Worker Bonus (“HWB”) program. The HWB program aims to award New York's frontline healthcare workers with $1.2 billion in bonuses. While the statute largely contemplates bonuses for employees of healthcare providers that bill for services under the state plan or via a managed care provider, independent schools are also expressly included in the definition of “qualified employer.”
Under the HWB program, while eligible workers are entitled to a bonus, it is the responsibility of independent schools to identify and notify eligible employees, track their bonus eligibility, submit claims for the bonus to the HWB portal, and distribute bonuses to eligible employees.
Who Is an Eligible Employee?
Eligible employees are those who provide “hands-on health or care services to individuals,” including nurses, occupational therapists, speech-language pathologists, licensed mental health counselors, and behavior intervention specialists (the full list of titles can be found here).
In addition to working in a “hands-on health or care service role,” an “eligible employee” is one who is employed by a “qualified employer” (i.e., an independent school) during the entire “vesting period”; who worked the required number of hours to be eligible for the HWB bonus during the “vesting period”; and who receives an annual base salary of $125,000 or less, excluding any bonuses or overtime pay.
What Is the Vesting Period?
The “vesting period” is a six-month period between October 1, 2021 and March 31, 2024, which is included in a vesting schedule published by the New York State Commissioner of Health. Upon an eligible employee’s completion of six months of consecutive employment with a qualified employer that ends within a vesting period established in the vesting schedule, an independent school has 30 days from the end of the vesting period to submit a claim for the bonus payment.
How Do Schools Determine the Bonus Amount?
Independent schools will be expected to claim, and then remit to eligible employees, the following bonus amounts based on the number of hours worked during the vesting period:
- Qualified employees who work at least 20 hours but no more than 30 hours per week are eligible for a bonus of $500.
- Qualified employees who work at least 30 hours but no more than 35 hours per week are eligible for a bonus of $1,000.
- Qualified employees who work at least 35 hours per week are eligible for a bonus of $1,500.
A qualified employee is eligible for only two vesting periods per employer in an amount equal to but no greater than $3,000 across all employers.
How Do Independent Schools Comply with the HWB Program?
What follows is a step-by-step guide for ensuring that independent schools are in compliance with the HWB program:
Registration. The HWB web portal will launch for employers in the education sector on October 1, 2022. At this time, independent schools should visit www.nysworkerbonus.com and begin reviewing important instructional information.
Tracking Hours. Employees are eligible for the bonus if they completed six months of consecutive employment within one of the vesting periods established by the Commissioner’s Vesting Schedule. Bonus eligibility and the amount depend on the number of hours worked, meaning that independent schools must track the number of hours that qualified employees are working during each vesting period. Employers should calculate accruals such as sick time, vacation, or Family Medical Leave Act (FMLA) as hours worked. Employers should exclude overtime hours when calculating the average weekly hours.
Submitting a Claim. After a qualified employee completes six months of consecutive employment that ends within a vesting period, the independent schools have 30 days from the end of the vesting period to submit a claim in the above portal for the bonus payment. Independent schools are required to submit their qualified employees’ data in a specified data format provided by the Department of Health.
Attestation. The bonus claim process requires all qualified employers, including independent schools, to electronically sign an attestation that acknowledges they understand and have determined that each employee included in their attestation is eligible to receive the Healthcare Worker Bonus. A copy of the attestation is available on the HWB Program Portal.
Payment of Bonuses. The state will remit bonus payments to independent schools — bonuses must then be paid to eligible employees within 30 days of the school’s receipt of the payment. Advance payments by the school are not permitted.
Tax Implications & Payroll. For federal income tax purposes, bonuses are considered supplemental wages and are required to be included as wages on the employee’s W-2. However, the HWB bonus is exempt from both New York State and local income tax. As there is no state withholding requirement for employees, employers should coordinate with their payroll vendor to ensure that state/local taxes are not withheld from the bonus payments.
Penalties for Noncompliance
Schools should also note that if they fail to identify, claim, and/or pay any bonus for more than 10% of eligible workers, they may be subject to penalties of up to $1,000 per violation of the HWB Program. The following checklist will help get your school on the right track so that you can mitigate your risk.
The Venable Independent School Law Team is prepared to assist schools with rolling out their HWB program and ensuring consistent compliance through the program end date on May 1, 2024. Independent schools with questions are encouraged to contact the authors of this article or any other member of the Independent Schools Team for assistance.