Wage Parity

What is Wage Parity?

New York’s Home Care Workers “Living Wage” Program affects over 60,000 downstate workers and employers. When Governor Andrew Cuomo signed into law the 2011-2012 budget, he included a package of Medicaid savings and reforms, with some of the most significant reforms taking place in the home care industry. For the first time, New York State required workers on any Medicaid case to be paid the same as the home attendants covered by the New York City living wage law. In home care, this became known as wage parity.

How does this impact employers?

Here’s what the law requires in New York City:

For “large” employers (those with 11 or more total employees):
• $13.00 per hour beginning December 31, 2017, plus $4.09 in benefits per hour
• $15.00 per hour beginning December 31, 2018, plus $4.09 in benefits per hour

For “small” employers (those with 10 or fewer total employees):
• $12.00 per hour beginning December 31, 2017, plus $4.09 in benefits per hour
• $13.50 per hour beginning December 31, 2018, plus $4.09 in benefits per hour
• $15.00 per hour beginning December 31, 2019, plus $4.09 in benefits per hour

Additional Wages are the amount of the Total Compensation that employers may satisfy through additional payments directly to home care aides for hours not worked and for differentials and premiums other than overtime. Examples include paid leave (vacation, holiday, sick and personal days), differentials or premiums for certain shifts (nights, weekends and holidays) or assignments (sleep–in or live–in work, care for multiple clients during the same shift), and our novel transportation benefit, Direct Care Carrier. Additional Wages do not include overtime compensation required under the Fair Labor Standards Act (FLSA) or State minimum wage orders or extra compensation creditable toward required overtime compensation for hours worked in excess of normal, regular or maximum daily or weekly hours. The Additional Wage portion can also be satisfied by increasing the Base Wage or Supplemental Wages by a corresponding amount.

Supplemental Wages are the amount of Total Compensation that employers may satisfy indirectly, for example, by providing education, pension benefits, or health insurance required by federal law. The Supplemental Wages portion can also be satisfied by increasing the Base Wage by a corresponding amount.

For Department of Social Services cases currently covered by living wage laws in Nassau, Suffolk and Westchester, the new requirements continue to rise over the next few years.
• $11.00 per hour beginning December 31, 2017, plus $3.22 in benefits per hour
• $12.00 per hour beginning December 31, 2018, plus $3.22 in benefits per hour
• $13.00 per hour beginning December 31, 2019, plus $3.22 in benefits per hour
• $14.00 per hour beginning December 31, 2020, plus $3.22 in benefits per hour
• $15.00 per hour beginning December 31, 2021, plus $3.22 in benefits per hour

Our Wage Parity Solution

The Integrated HR has a one-stop solution that minimizes the financial impact of wage parity on the client, while providing a robust employee benefit solution. In conjunction with a leading group indemnity medical benefit provider, FNA has crafted a medical plan that addresses the requirements of wage parity. By offering a health plan benefit, your  employees can seek care before a minor illness or injury turns into something more serious, and when a network provider is selected, fees are reduced. Healthier employees who are more productive are another advantage of our solution. Through this offering you provide a quality set of benefits while limiting your client’s potential tax exposure via a cash payout. Our Health Plans are Group Indemnity Medical Insurance filed and regulated by the NY Department of Insurance Plans and include all required State of New York mandated benefits.

Your Bottom Line-Wage Parity Paid in Benefits vs. Payroll:
Savings Resulting from Group Sponsored Health Benefit Plan
$153,709 + ADMINISTRATIVE SAVINGS!
$3.22 X 500 full time employees X 40 hours/wk X 52 weeks X 7.65% FICA
rate X 60% (inverse of federal/state tax benefit) or $153,709.

This illustration should not be used in any actual transaction without the advice and guidance of a professional Tax Adviser who is familiar with all the relevant facts. Although the information contained here is presented in good faith and believed to be correct, it is general in nature and is not intended as tax advice. Furthermore, the information contained herein may not be applicable to or suitable for the individuals’ specific circumstances or needs and may require consideration of other matters not be available.