Minimum Wage. NYS Minimum Wage. NYS Minimum Wage

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1 LeadingAge Financial Managers Annual Conference Keeping Your Organization Grounded in the Wage and Hour Whirlwind Presented by: Joseph M. Dougherty, Esq. Overview NYS Minimum Wage Federal Overtime Exemption Changes New Era of Home Care Minimum Wage and Overtime NYS State Family Medical Leave Act NYS Minimum Wage The Minimum Wage Act (Article 19 of the New York State Labor Law) requires that all employees in New York State receive at least $9.00 per hour. This includes domestic workers. Regulations known as 'Wage Orders' set certain requirements that are industry specific. The rates contained in these Wage Orders may differ from the general Minimum Wage rate. 1

2 NYS Minimum Wage As of December 31, 2015, the Minimum Wage for individuals working in the fast food industry is $10.50 per hour in New York City, and $9.75 per hour in the rest of the state. As of December 31, 2015, the Minimum Cash Wage for Tipped Workers in the Hospitality Industry is $7.50 per hour if they earn enough in tips. NYS Minimum Wage As of December 31, 2015, the Minimum Wage for other Tipped Workers is $7.65 per hour if they earn at least $1.35 per hour in tips, or $6.80 per hour if they earn at least $2.20 per hour in tips. As of December 31, 2015, the Minimum Wage for all other workers is $9.00 per hour. NYS Minimum Wage 2016 and Beyond Enacted NYS Budget included agreement on increasing the state s minimum wage: New York State Effective Date Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Minimum Wage $9.70 per hour $10.40 per hour $11.10 per hour $11.80 per hour $12.50 per hour 2

3 NYS Minimum Wage 2016 and Beyond New York City Effective Date Minimum Wage (11 or more employees) Minimum Wage (10 or fewer employees) Dec. 31, 2016 $11 per hour $10.50 per hour Dec. 31, 2017 $13 per hour $12 per hour Dec. 31, 2018 $15 per hour $13 per hour Dec. 31, 2019 $15 per hour NYS Minimum Wage 2016 and Beyond Nassau, Suffolk and Westchester Counties Effective Date Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 Minimum Wage $10 per hour $11 per hour $12 per hour $13 per hour $14 per hour $15 per hour NYS Minimum Wage 2016 and Beyond Tipped Workers The minimum wage for tipped workers is set at two-thirds of the minimum wage rates above, rounded to the nearest five cents or $7.50, whichever is higher. 3

4 NYS Minimum Wage 2016 and Beyond Possible Suspension of Minimum Wage Increases On and after January 1, 2019 until such time as the minimum wage is fifteen dollars in all areas of the state, the Division of the Budget shall conduct an analysis of the state of the economy in each region, and the effect of the minimum wage increases listed in this section, to determine whether there should be a temporary suspension or delay in any scheduled increases. NYS Minimum Wage Enforcement The Wage Theft Prevention Act (WTPA) took effect on April 9, The law requires employers to give written notice of wage rates to each new hire. The notice must include: Rate or rates of pay, including overtime rate of pay (if it applies) How the employee is paid: by the hour, shift, day, week, commission, etc. Regular payday Official name of the employer and any other names used for business (DBA) Address and phone number of the employer's main office or principal location Allowances taken as part of the minimum wage (tips, meal and lodging deductions) NYS Minimum Wage Enforcement The notice must be given both in English and in the employee's primary language (if the Labor Department offers a translation). The Department currently offers translations in the following languages: Spanish, Chinese, Haitian Creole, Korean, Polish and Russian. 4

5 NYS Minimum Wage Enforcement Employee Misclassification (Exempt v. Non-Exempt) NYSDOL Division of Labor Standards (UI) NYSDOL Wage and Hour Division NYS Workers Compensation Board Fair Labor Standards Act & Overtime Federal White Collar Overtime Exemptions White Collar Exemptions: Executive Employees Administrative Employees Professional Employees Computer Employees Outside Sales Employees 5

6 FLSA Background The FLSA excludes certain executive, administrative, and professional employees from Federal minimum wage and overtime requirements which are commonly referred to as the EAP or white collar exemptions. Presently, to qualify for one of these exemptions, employees must: (1) Be salaried, meaning that they are paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed; (2) Be paid more than a specified salary threshold, currently $455 per week or $23,660 annually; and (3) Primarily perform executive, administrative, or professional duties as provided in the DOL s regulations (the Duties Test ). FLSA Background Certain highly compensated employees are exempt from the FLSA s overtime pay requirements ( HCE exemption) if: 1. They are paid total annual compensation of at least $100,000; 2. Receive at least $455 per week paid on a salary or fee basis; 3. Perform office or non-manual work; and 4. Customarily and regularly perform at least one of the exempt duties or responsibilities of an executive, administrative, or professional employee Federal v. NYS Law With few exceptions, New York law generally follows the overtime provisions and exemptions set forth by the FLSA. See 12 NYCRR However, there are several important distinctions between New York law and the FLSA. Notably, under New York law the salary threshold equals $ per week as of December 31, 2014 and will increase to $675 per week effective December 31, 2015 for the executive and administrative employee exemptions. New York does not require any minimum weekly amount for the professional employee exemption. See 12 NYCRR (c)(4)(iii). 6

7 White Collar Exemption Changes On May 18, 2016, after approximately two years of work, the United States Department of Labor ( DOL ) issued its Final Rule implementing revisions to the regulations governing the application of the White Collar exemptions for overtime under the Fair Labor Standards Act ( FLSA ). The Final Rule, which amends 29 CFR Part 541 to more than double the minimum salary necessary for a worker to be classified as exempt from the FLSA overtime regulations (the EAP threshold ). In addition, the Final Rule increases the minimum salary for the Highly Compensated Employee exemption (the HCE threshold ), and allows employers to begin using nondiscretionary bonuses and incentive payments to determine whether employees are exempt from overtime requirements. The Final Rule will take effect on December 1, White Collar Exemption Changes PROJECTED IMPACT ON WORKERS DOL estimates that the Final Rule will result in approximately 4.2 million currently exempt workers becoming eligible for overtime pay. DOL also estimates that the Final Rule will result in $12 billion in increased wages over the next ten years, with an increase of about $1.2 billion each year. The Obama Administration released a State-by-State Breakdown of Workers Affected by Department of Labor s Final Overtime Regulation, which provides estimates of currently exempt workers who will become overtime-eligible under the Final Rule based upon gender, age, educational attainment and state. According to this document, the Obama Administration estimates that approximately 277,998 workers in New York will be affected by the Final Rule. Salary Basis / HCE Test Topic Current Law Proposed Rule Final Rule effective December 1, 2016 Salary Level $23,660 per year, $455 per week Highly Compensated Employee Salary Level $50,440 per year, $921 per week $47,476 per year, $913 per week $100,000 $122,148 $134,004 7

8 White Collar Exemption Changes Nondiscretionary Bonuses and Commissions to Count towards the EAP Threshold Currently, employers may count nondiscretionary bonuses, incentives, and commissions towards the HCE threshold so long as the employee earns $455 of standard salary per week. The Final Rule raises the minimum weekly salary to $913, but does not alter employers ability to use nondiscretionary bonuses and incentive payments to reach the HCE threshold. However, the Final Rule permits employers for the first time to count nondiscretionary bonuses, incentives, and commissions toward up to ten percent of the EAP threshold, but such payments must be made on a quarterly or more frequent basis. To assist with compliance, the Final Rule permits employers to ensure that Executive, Administrative, and Professional employees reach the EAP threshold in a given quarter through the use of quarterly catch-up payments. White Collar Exemption Changes Nondiscretionary Bonuses and Commissions to Count towards the EAP Threshold For example, an employer may pay an employee who otherwise qualifies for an Executive, Administrative, or Professional exemption ninety percent of the EAP threshold in addition to bonuses, incentives, or commissions. If, at the end of the quarter, the employee s incentive payments are insufficient to reach the EAP threshold, the employer may pay the employee the amount of the deficiency during the next pay period, and count this catchup payment towards the previous quarter. As such, the employee qualifies for the FLSA exemption even where the employee did not meet the EAP threshold during the quarter because of insufficient incentive payments. If the employer chooses not to make the catch-up payment, then the employee is entitled to any overtime pay accrued during the quarter. Importantly, the Final Rule does not alter the requirement that where an employer offers nondiscretionary bonuses and incentive payments to overtime-eligible employees, the employer must include such payments into the regular rate when calculating overtime pay. EAP Threshold Updates New Methodology for Calculating the EAP and HCE Thresholds The Final Rule amends how the EAP threshold is calculated in order to account for geographic differences within the United States. Specifically, the EAP threshold equals the income of the 40th percentile of salaried employees within the Census Region with the lowest income. The Census Bureau divides the country into five Census Regions: the Northeast, the Southeast, the Midwest, the Southwest, and the West. The lowest income region is currently the Southeast, such that the EAP threshold represents the 40th percentile of salaried workers in the Southeast Census Region. In its summary of the Final Rule, DOL estimated that the salary threshold will be raised to about $51,168 on January 1, 2020, based upon this methodology. In contrast, the HCE threshold is based upon the 90th percentile of salaried workers nationally. DOL estimates that the HCE threshold will be raised to about $147,524 on January 1,

9 White Collar Change Effective Date The Final Rule is scheduled to take effect on December 1, Under the Final Rule, DOL will update the EAP and HCE thresholds every three years, beginning on January 1, New Era of Home Care Minimum Wage & Overtime FLSA Requires employers to pay minimum wage and overtime to employees. Overtime compensation must be paid at a rate not less than 1 ½ times the regular rate at which the employee is employed. Exemption from minimum wage and overtime requirements for domestic service workers. 9

10 Home Care Association of America v. Weil Section 13(a)(15) of the FLSA provides an exemption from the minimum wage and overtime requirements for: any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves. Created in 1974, when Congress extended FLSA coverage to other domestic service workers Congress granted the Secretary of Labor authority to define the terms in the exemption, and DOL exercised that authority in 1975 by issuing the regulations at 29 C.F.R. Part 552 Section 13(b)(21) of the FLSA provides an exemption only from the overtime requirements for: any employee who is employed in domestic service in a household and who resides in such household. Third-Party Employment Section (a) and (c) of the regulations provided that the companionship and live in exemptions were available for employees who are employed by an employer or agency other than the family or household using their services. The New Rule revises Section to deny the exemption to third-party employers. Companionship Services Section of the regulations defined companionship services as services which provide fellowship, care and protection The New Rule revises Section to define companionship services as the provision of fellowship and protection Care is no longer part of the core definition 10

11 Companionship Exemption Timeline October 1, 2013 USDOL issue Final Rule June 2014, Home Care Association of America v. Weil challenges Final Rule December 2014, DC District Court rules in favor of Home Care Association of America and vacates USDOL Final Rule August 21, 2015, DC Circuit Court overturns the DC Circuit Court and upheld the Final Rule September 2015, DC Circuit Court denies motion for stay pending appeal to SCOTUS October 2015, Chief Justice Roberts denies motion for stay pending appeal to SCOTUS October 15, 2015 Final Rule effective USDOL delayed enforcement until November 15, 2015 Supreme Court? The SCOTUS has several options: Deny review of the decision by the court of appeals This outcome means full enforcement of the final new regulations, which are now in effect - minimum wage and overtime available for employees of any 3 rd Party Agency. Grant review and Reverse court of appeals on the 3rd party issue; then remand to the appeals court to reconsider the companionship definition Affirm court of appeals rule stays in effect Questions of timing CHANGES TO FLSA Minimum wage and overtime protections extended to all direct care workers employed by home care agencies and third parties Overtime wages must be paid at time and a half of the regular wage rather than time and a half of the minimum wage Additional record keeping requirements for live-in domestic service employees * USDOL Announced delayed enforcement until November 15,

12 CHANGES TO FLSA COMPANIONSHIP EXEMPTION No longer available to third party employers such as home health agencies Third party employers must pay their workers the federal minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 40 in a work week Only available to individual, family or household solely or jointly employing the worker COMPANIONSHIP SERVICES Under the companionship services test, companionship services are defined as fellowship and protection and also include the provision of care activities as long as the care activities do not exceed 20% of the worker s time. If a worker providing services in a private home spends more than 20% of the work week providing assistance with activities of daily living, the worker is not providing companionship services and must be paid at least the minimum wage and overtime at time-and-a-half the regular pay rate. Who is Impacted? Direct Care Workers 46 percent of individuals over the age of 65 need some form of daily assistance to remain in the community 36 percent of seniors need help with Activities of Daily Living (ADLs)* 33 percent of seniors need help with Instrumental Activities of Daily Living (IADLs)* The number of seniors who will need help with ADL or IADLS is expected to double with the aging baby boomers Seniors aged 85 and older (74%), aged (51%) and aged (37%) will need long-term services and supports* Presently over 2 million direct care workers provide essential home care assistance to seniors or individuals with a disability The majority are employed by home care agencies, nearly 90% are women and nearly 50% are minorities 12

13 Direct Care Workers Con t. Impact Shrinking Pool of Caregivers Direct care workers have been exempt from federal wage laws since 1974, ends the 40 year old plus exemption Classified into the same companionship services category as baby sitters, a group that is exempt from minimum wage and overtime coverage US Dept. of Labor We ve seen a lot of turnover in this industry, and we believe that this new rule will stabilize the work force. Others concerned with cost if Medicaid rates are not adjusted, less care, more Part Time aides, more on-call caregivers, patients have more aides if hours require more than 40 hours per week Impacts to other states Overview of States Impact 15 states already extend state minimum wage (MW) and overtime (OT) protections to direct care workers (NY) 20 plus states and Puerto Rico for the first time workers will have MW and OT rights 13 states and D.C. workers will be covered by a higher state minimum wage rate vs. federal minimum wage 5 states and D.C. workers for the first time will have OT rights In 2013, the nation s home care workers usually earned $8.50 to $12 hour Estimated 40% of aides receive government benefits (i.e. SNAP/Medicaid) Employment projections (US DOL Occupational Outlook) Home Health Aides expected to grow by 48 percent Personal Care Aides expected to grow by 49 percent Home Care and Nursing Industries are a Target United States Department of Labor 2016 budget incudes a increase in investigators, staff and higher budget for enforcement 300 new investigators 31.7 million budget increase New York State Department of Labor Plaintiffs Bar Home Care Workers You May be Owed $ 13

14 Home Care and Nursing Industries are a Target Plaintiffs Bar Home Care Workers You May be Owed $ Saodat Ullieva, individually and on behalf of all others similarly Bethania Rodriguez, individually and on behalf of all other situated persons similarly situated v. v. Human Care LLC New York Foundation for Senior Citizens Home Attendant (Supreme Court, Kings County, December 22, 2015) Services Inc.; William R. Pawson; Does (Southern District of New York, December 16, 2015) Loubov Matala-De-Mazza, individually and on behalf of all other persons similarly situated Marcia Almonte v. v. Special Touch Home Care Services Inc.; Steven Ostrovsky People Care Incorporated (Supreme Court, Kings County, December 18, 2015) (Supreme Court, New York County, December 15, 2015) Ikram Turgunbaev, individually and on behalf of all others similarly situated v. Home Family Care Inc. (Supreme Court, Kings County, December 17, 2015) Marina Naislosa v. All Metro Aids of Suffolk County Inc. aka All Metro Aids Inc. aka All Metro Health Care (Supreme Court, Kings County, December 14, 2015) Home Care and Nursing Industries are a Target Plaintiffs Bar Home Care Workers You May be Owed $ Marina Ulianova v. 1st Choice Home Care Services Inc. (Supreme Court, Kings County, December 14, 2015) Tamara Nikolaeva v. Home Attendant Services of Hyde Park (Eastern District of New York, December 8, 2015) Ramona Bonilla v. First Care of New York Inc. (Supreme Court, New York County, December 4, 2015) Donata E. Velazquez, individually and on behalf of others similarly situated v. The Estate of Murray H. Antonier (Southern District of New York, November 12, 2015) Ikram Turgunbaev, individually and on behalf of others similarly situated v. Special Touch Home Care Services Inc. (Supreme Court, Kings County, November 5, 2015) Ikram Turgunbaev, individually and on behalf of others similarly situated v. Americare Inc. (Supreme Court, Kings County, November 4, 2015) Dinora Romero, on behalf of herself and all others similarly situated v. Bestcare, Inc., Bestcare Management and Lawrence Wiener (Eastern District of New York, December 30, 20 Irina Korobkova v. Home Attendant Vendor Agency Inc. (Eastern District of New York, November 10, 2015) On-Call Time On-call time is compensable if an employee is unable to use the time effectively for his/her own purposes Required to stay on or close to the employer s premises Responds to calls frequently Short required response time Any other limitations on employee s use of his or her time On-call time is not work merely because the employee is required to carry a pager, cell phone or leave a telephone number where s/he can be reached 14

15 Training/Meeting Time Training time is compensable work hours unless all four of the following requirements are met: 1. Attendance is outside regular working hours 2. Attendance is voluntary 3. The training/meeting is not job related 4. The employee does not perform any productive work during the training/meeting Travel Time - FLSA Compensable Travel between job sites during the work day Travel to another city for special one-day assignments (minus normal commute time) Overnight travel during the employee s normal work hours (on a work or non-work day) Not Compensable Normal home-to-work commuting, unless employee begins work prior to commuting Overnight travel, if outside the employee s normal work hours (on a work or non-work day) Sleep Time Federal Law Sleep time can be excluded from work time only if employee is on duty 24 hours or more, and employee: Agrees that up to 8 hours of sleep time will not be paid Has adequate sleeping facilities Is generally able to enjoy an uninterrupted night of sleep Is paid for any interruption of sleep time Is paid for the entire night if the employee gets less than five hours of sleep in period Up to three, one-hour off-duty meal periods also may be unpaid Caregivers who are on duty for 24 hours or more are not necessarily live-in caregivers 15

16 Live-Ins and Extended Shift Caregivers To be considered a Live-In: Resides on an employer s premises seven days a week such that he or she has no other home; or Lives, works, and sleeps on the premises 5 days per week and 120 hours or more; or If he or she spends less than 120 hours working and sleeping on the employer s premises, he or she spends five consecutive days or nights residing on the premises. For caregivers who are not Live-Ins but are on-duty for 24 hours or more: Off-duty time (i.e., rest periods) can break the 24-hour shift Meal periods do not break the on-duty time Additional Concerns for Live-In Caregivers Calculating total hours worked Sleep Periods Meal Periods Other Off-Duty Time Reasonable agreement Distinct time sheet and certification Meal & Lodging Credits Under 3(m) of the FLSA, an employer may take credit toward wages for the reasonable cost or fair value of lodging provided to an employee under certain circumstances. Calculate under 3(m): the value of the room and board is added to cash wages and divided by the hours worked in a given week. DOL has stated it is a credit toward the minimum wage obligation; it does not count toward any overtime obligation. Credit applies regardless of which employer pays for the housing These credits can only be used as against minimum wage claims, not overtime claims. See Estanislau v. Manchester Developers, LLC, (D.Conn.2004); see also Moon v. Kwon (S.D.N.Y.2002) 16

17 NEW YORK WAGE & HOUR LAW Compensability of Sleep Time NY Department of Labor March 11, 2010 Opinion Letter: [I]t is the opinion and policy of this Department that live-in employees must be paid not less than for thirteen hours per twenty-four hour period provided that they are afforded at least eight hours for sleep and actually receive five hours of uninterrupted sleep, and that they are afforded three hours for meals. Federal Court Follows the Opinion Letter Severin v. Project Ohr, Inc.: Court found that the DOL s interpretation should be given deference because it does not conflict with the regulations, is not unreasonable or irrational, and the interpretation draws upon a federal regulation permitting the exclusion of an eight hour sleeping period during a 24-hour shift Court rejected the plaintiff s argument that the DOL Opinion Letter should not be followed because the term live in employee is not defined. 17

18 NY Supreme Court Rejects the Opinion Letter Andryeyeva v. New York Health Care, Inc.: Court rejected defendants contention that, as a matter of law, sleep and meal hours must be excluded from the hourly wages of a home attendant who does not reside or live in the home of his or her client. As a nonresidential employee, a putative class member is required by the defendant employer to be on the premises of the client for twenty-four hours, predominantly for the benefit of the employer and the client, and the time the home attendant actually spends sleeping or for meals is irrelevant. Why? The minimum wage order applicable to home attendants provides: The minimum wage shall be paid for the time an employee is permitted to work, or is required to be available for work at a place prescribed by the employer... However, a residential employee one who lives on the premises of the employer shall not be deemed to be permitted to work or required to be available for work (1) during his or her normal sleeping hours solely because he is required to be on call during such hours; or (2) at any other time when he or she is free to leave the place of employment. No Deference In the March 11, 2010 Opinion Letter, the NY DOL found that the distinction regarding whether or not the attendant is "residential" is only "important for the purposes of determining the number of hours at which overtime is owed (44 for residential employees vs. 40 for non-residential employees)," however, "the Department applies the same test for determining the number of hours worked by all live-in employees Meaning sleep and meal period are excluded from hours worked for both residential and non-residential employees The Andryeyeva Court declined to give deference to the NY DOL on this interpretation, finding that nonresidential employees must be paid for every hour of a 24 hour shift and each hour must be counted towards overtime. 18

19 Status of Andryeveva Currently on appeal to the NY Supreme Court- Appellate Division, Second Department OT - Non-residential vs. Residential Employees Residential employee is defined by 12 NYCRR as one who lives on the premises of the employer and are paid OT after 44 hours in a week Settlement Home Care v. Industrial Bd. Of Appeals of Dep t of Labor: Court found that home care attendants employed by agencies who provide 24-hour care do not live on the premises of the employer because they are not employed directly by the client OT - Non-residential vs. Residential Employees Severin v. Project OHR, Inc.: Court held that OHR s home attendants who provide 24-hour care in the client s homes are non- residential employees and New York s overtime regulation applies to hours worked over 40 per week. 19

20 Spread of Hours and Split Shifts Premium An employee shall receive one hour's pay at the basic minimum hourly wage rate, in addition to the minimum wage required herein for any day in which: (a) the spread of hours exceeds 10 hours; (b) there is a split shift; or (c) both situations occur. SPREAD OF HOURS/SPLIT SHIFTS DEFINED Regulation 12 NYCRR defines "spread of hours" as "the interval between the beginning and end of an employee's workday. The spread of hours includes working time plus time off for meals plus intervals off duty." A split shift is a schedule of daily hours in which the working hours required or permitted are not consecutive. No meal period of one hour or less shall be considered an interruption of consecutive hours. 12 NYCRR Additional Hour at Minimum Wage Rate Note that this is only a requirement that that the total wages paid be equal to or greater than the total due for all hours at the minimum wage plus one additional hour at the minimum wage. NY DOL Opinion Letter RO (August 26, 2009). Thus, take total compensation and divide by hours worked plus one additional hour and if hourly rate equals at least the minimum wage for every hour, then you do not have to pay an additional hourly rate 20

21 CALL-IN PAY Call-in pay. An employee who by request or permission of the employer reports for work on any day shall be paid for at least four hours, or the number of hours in the regularly scheduled shift, whichever is less, at the basic minimum hourly wage NY DOMESTIC WORKERS BILL OF RIGHTS A law that went into effect on November 29, 2010 (Chapter 481 of the Laws of 2010) This law gives domestic workers: The right to overtime pay at time-and-a-half after 40 hours of work in a week, or 44 hours for workers who live in their employer s home; A day of rest (24 hours) every seven days, or overtime pay if they agree to work on that day; Three paid days of rest each year after one year of work for the same employer; and Protection under New York State Human Rights Law, and the creation of a special cause of action for domestic workers who suffer sexual or racial harassment. DOMESTIC WORKER DEFINED "Domestic worker" shall mean a person employed in a home or residence for the purpose of caring for a child, serving as a companion for a sick, convalescing or elderly person, housekeeping, or for any other domestic service purpose. "Domestic worker" does not include any individual (a) working on a casual basis, (b) who is engaged in providing companionship services, as defined in paragraph fifteen of subdivision (a) of section 213 of the fair labor standards act of 1938, and who is employed by an employer or agency other than the family or household using his or her services,.n.y. Labor Law 2.16 and Human Rights Law (N.Y. Exec. Law) 296-b. 21

22 NEW YORK STATE WAGE PARITY LAW NEW YORK PUBLIC HEALTH LAW 3614-C The law covers home care aides, defined as a home health aide, personal care aide, home attendant or other licensed or unlicensed person whose primary responsibility includes the provision of in-home assistance with activities of daily living, instrumental activities of daily living or health-related tasks. N.Y. Pub. Health L c(1)(d). The law applies to certified home health agencies ( CHHAs ), long term home health care programs ( LTHHCPs ) or managed care organizations ( MCOs ). N.Y. Pub. Health L c(1)(d) WAGE PARITY LAW Generally, the law establishes a minimum wage for home care aides who perform Medicaid reimbursed work for CHHAs, LTHHCPs and MCOs within New York City and within the counties of Nassau, Suffolk and Westchester. Rates increase periodically, check for new rates New York City- For the period of March 1, 2016 through February 28, 2017, the minimum rate home care aide total compensation (Total Compensation) will be $14.09, consisting of a Base Wage of at least $10.00 per hour, Additional Wages of up to $1.69 per hour, and Supplemental (benefit) Wages of up to $2.40 per hour. Nassau, Suffolk and Westchester-For the period of March 1, 2015 through February 28, 2016, the minimum rate home care aide total compensation will be $11.50, consisting of a base wage of at least $10.00 per hour, and supplemental (benefit) wages of up to $1.50 per hour. Penalties for noncompliance can be denied payment by government agencies for any episode of care furnished, in whole or in part, by any home care aide who is compensated at amounts less than the applicable minimum rate of home care aide WAGE PARITY LAW & OVERTIME Overtime is required at ½ times the regular rate of compensation under the Fair Labor Standards Act (FLSA) as well as under the New York State Labor Law's provisions for minimum wage and for domestic workers. The exceptions to this general rule that applied to most employers of home care workers and to certain non-profits prior to 2015 no longer apply to third party employers, such as home care agencies, as a result of the new FLSA overtime rules for home companions already in effect. The Overtime premium pay that employers are required to pay for overtime hours under state and federal minimum wage laws may be used to satisfy the Total Compensation required under the wage parity law. As such, if a worker is being paid $15 an hour for overtime work, the Total Compensation rate of $14.09 will be fully satisfied during overtime hours. Nothing more needs to be paid for those overtime hours. See the attached notice regarding overtime pay under Wage Parity. 22

23 WAGE PARITY LAW & OVERTIME Notice Regarding Overtime Pay under Wage Parity While overtime pay can be used to satisfy the Total Compensation requirement for a given hour of overtime, it cannot be used more generally to also satisfy the Total Compensation requirement for non-overtime hours. Thus, for example, if a worker is paid $15 for an hour of overtime, payment of that $15 for that hour can be used to satisfy the Total Compensation rate for that hour. In that example, if the Total Compensation rate is $14.09, then that requirement to pay or prove $14.09 is fully satisfied by payment of $15, for that same hour of overtime. By contrast, however, no part of the $15 paid for a given hour of overtime can be used to satisfy the Total Compensation rate for all hours, generally, or for non-overtime hours, specifically. Suffolk, Nassau and Westchester County living wage laws The Suffolk County living wage law establishes a policy whereby businesses and their subcontractors receiving compensation from the County and employing 10 or more people, are required to pay a living wage. The living wage shall be calculated on an hourly basis and shall be no less than $11.91 per hour with health benefits or $13.56 without health benefits and 12 paid days off per year As of August 1, 2015, the Nassau County Living Wage is $15.54 an hour or $13.59 with health benefits. This rate will stay in effect until August 1, 2016, when it will be adjusted upward. Also entitled to 12 paid days off per year. The living wage in Westchester County is $11.50 per hour plus health insurance benefits; or $13.00 without health insurance benefits. This has been the applicable rate since Also entitled to 12 paid days off per year. WHAT DO WE DO NOW? 23

24 Limit Overtime Costs Limit work hours to under 40 and hire additional home care aides? Restructure compensation to minimize the cost of overtime? Hourly paid employees must be paid overtime at 1 ½ times their regular rate of pay Employees paid on a piece rate (per visit) and some salaried paid employees can be paid overtime at ½ times their regular rate Timekeeping Practices Home care companies should evaluate whether their current timekeeping practices will allow home care aides working remotely to accurately record all hours worked, including clocking out and back in for unpaid meal periods Best practice is to require home care aides to review and certify each payroll period that recorded hours are accurate Payroll System Home care employers should review their payroll systems to ensure they do not include commonly targeted pay practices and confirm that overtime pay will be calculated correctly Ensure the payroll system is correctly calculating the regular rate of pay for non-exempt employees paid: On a piece rate (per visit) A salary Any incentive or bonus compensation in addition to hourly wages, salary or piece rate 24

25 Problem Areas Paying day rates to live-in or extended shift employees. Employee share agreements between agencies. Reduction of pay rate after 40 hours of work. Compensation only for billable time. Failure to reimburse mileage for minimum wage employees. Conversion from a W-2 to 1099 model. Using assumed travel times. Building a Good Faith Defense to Off-The-Clock Claims Key problem for health care employers is lack of sufficient evidence to establish proper timekeeping and good faith defense to off-the-clock claims. Compliance model should be targeted toward building evidence of employer s good faith efforts to ensure employees accurately report and are paid for all working time. Effective Compliance Roll Out Effective Wage & Hour Policies Eliminate Assumptions Complaint and Investigation Procedures Train Your Employees Implement Arbitration Agreements Do Not Convert Employees to Independent Contractors 25

26 Effective Policies Policies must address all areas of potential wage and hour compliance concerns Policies must be well-publicized and easy to locate All employees should review policies on a regular basis and acknowledge receipt of same All employees should be trained on key policies Confidential Complaint Mechanism ment a Give Complaint employees a choice: Mechanism Ethics or compliance hotline (1-800 #) Designated HR professional A senior manager Revise existing complaint mechanism to ensure it specifically addresses wage and hour issues. Training Reclassified home care aides, and managers supervising non-exempt employees for the first time, should be provided training on: Activities that are considered hours worked for which non-exempt employees must be paid Timekeeping procedures New or revised policies on off-the-clock work, travel time, sleep time, etc. 26

27 NYS Family Medical Leave Act NYS FMLA On April 4, 2016, New York Governor Andrew Cuomo signed legislation adopting a 12-week paid family leave policy for New York employees (the Paid Leave Law ). Once fully implemented, the Paid Leave Law will provide New York employees with up to 12 weeks of paid family leave NYS FMLA Permissible Uses (1) caring for a new child, (2) caring for a family member with a serious health condition, or (3) relieving family pressures when a family member, including a spouse, domestic partner, child or parent, is called to active military service. 27

28 NYS FMLA Permissible Uses Paid leave to care for a new child will be available to both men and women and will include leave to care for an adoptive or foster child. An employee may take paid leave to care for a new child any time within the first 12 months after the child s birth or 12 months after the placement for adoption or foster care of a child with the employee. NYS FMLA Permissible Uses Paid leave to care for a family member with a serious health condition, includes leave to care for a child, parent, grandchild, grandparent, spouse or domestic partner. The legislation allows employers to establish rules limiting employees from receiving paid leave benefits for the care of the same family member at the same time as another employee. NYS FMLA PHASE IN Employers should note that the new paid family leave policy will be implemented gradually. Starting on January 1, 2018, employees will be eligible for eight weeks of paid leave, earning 50% of their weekly pay (capped at 50% of the statewide average weekly pay). 28

29 NYS FMLA PHASE IN The number of weeks of leave and amount of pay increases yearly until, by 2021, employees will be eligible for the full 12 weeks of paid leave, earning 67% of their weekly pay (capped at 67% of the statewide average weekly pay). NYS FMLA PHASE IN The number of weeks of leave and amount of pay increases yearly until, by 2021, employees will be eligible for the full 12 weeks of paid leave, earning 67% of their weekly pay (capped at 67% of the statewide average weekly pay). NYS FMLA PHASE IN January 1, weeks during any 52 week calendar period and shall be 50% of the employee's average weekly wage but shall not exceed 50% of the state average weekly wage; January 1, weeks during any 52 week calendar period and shall be 55% of the employee's average weekly wage but shall not exceed 55% of the state average weekly wage; 29

30 NYS FMLA PHASE IN January 1, weeks during any 52 week calendar period and shall be 60% of the employee's average weekly wage but shall not exceed 60% of the state average weekly wage; January 1, 2021 and12 weeks during any 52 week calendar period and shall be 67% of the employee's average weekly wage but shall not exceed 67% of the New York state average weekly wage. DFS has discretion to delay the increases in the family leave benefit level. NYS FMLA ELIGIBILITY In order to be eligible to receive paid leave benefits, employees are required to have worked for their employer for at least 6 months. Paid leave benefits will be available on the first full day that leave is required for eligible employees (unlike New York State disability benefits where there is a waiting period before employees start receiving benefits). NYS FMLA FUNDING Significantly, the paid family leave will be funded by a weekly payroll tax of about $1 per employee, deducted from employees paychecks. Based on this insurance model, employers will not have to face the direct financial burden of funding the paid leave benefits provided under the new law. 30

31 NYS FMLA NEXT STEPS Employers should begin to prepare for other administrative costs associated with the new law, including costs for implementing changes to internal policies and costs related to employee absences during their paid family leaves. NYS Proposed Regulations and Implementation Guidance Questions? 31