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NYS Expands Healthcare Worker Bonus Program

December 08, 2022

Written by Complete Payroll

nys healthcare worker bonus taxable doctor

If the world learned anything during the COVID-19 pandemic, it’s that healthcare workers play an essential part in our society. 

Whether in the middle of a global pandemic or not, these workers stand between people and catastrophe daily. New York State announced the New York State Healthcare Worker Bonus program earlier this summer to retain these essential workers. 

Built within the 2022-2023 New York State budget, this program supports the retention of healthcare workers while encouraging others to enter the field when healthcare staff shortages continue to afflict the entire state. As a result, state legislators hope it will increase the healthcare workforce by as much as 20% by 2027.

We will outline precisely what you need to know about who is qualified to receive this bonus and your next steps as an employer. 

Who Are Qualified Employers?

There is a wide variety of employers who are qualified to offer this bonus. They include hospitals, nursing homes, behavioral health facilities, school districts, and more. 

According to the program requirements, qualified employers are employers that:

  • Bill for services under the Medicaid state plan
  • Bill for services under the home or community-based services waiver
  • Bill for services for Medicaid through a managed care organization or long-term care plan

Employers that qualify under these guidelines can include individual providers, facilities, pharmacies, specific programs funded by state agencies, or school health centers licensed under the Public Health Law, Mental Hygiene Law, and Education Law. 

Who Is Eligible to Receive the Bonus?

This program was designed to retain and recruit workers that provide hands-on care within clinical or non-clinical services. This can include part-time, full-time, or temporary employees of qualified entities. 

To receive the bonus, these employees must: 

  • Work continuously for the duration of at least one vesting period by a qualified employer
  • Hold a title on the list of Eligible Work Titles
  • Not be suspended or excluded from Medicaid during the vesting period
  • Not exceed an annual base salary of $125,000, excluding overtime and bonus pay

Employees not eligible for this bonus program include home health aides and personal care assistants (PCAs). These employees already received a state-mandated $2.00 an hour pay raise that went into effect October 1st. They will also receive an additional $1.00 an hour in 2023. 

Bonus Details

To ensure qualified employees receive their bonuses, eligible employers need to follow the following steps:

  1. Submit claims for payments made to qualified employees for participation in the bonus program. These claims must be submitted within 30 days after the vesting schedule is published and after each additional vesting period.
  2. Once employees are vested, employers must provide these employees with an Employee Attestation Form to be returned before the due date of the claim.
  3. Once the employer receives the bonus, employers must pay bonuses to eligible employees who are vested no later than 30 days after.

The amount the employee will receive is based on the hours the employee works during that specific vesting period. The amounts are as follows:

  • Employees who work at least 20 hours but no more than 30 hours a week = $500
  • Employees who work at least 30 hours but no more than 35 hours a week = $1,000
  • Employees who work at least 35 hours per week = $1,500

How to Handle Taxes on Bonuses

All bonuses earned are subject to federal tax withholding and should be part of the employee’s W-2. However, these bonuses are not taxable at the state and local levels. Additionally, these bonuses are not considered income for public assistance and other benefit programs the employee may be eligible to receive. 

What Are Other Employer Requirements?

It is the sole responsibility of the employer to determine employee eligibility. If an employer fails to identify, claim, and pay more than 10% of their eligible employees, actions and penalties may be taken against the employer. 

Employers must also track all hours that eligible employees work during the vesting periods. Additionally, they must submit their claims for reimbursement for bonus payments through the online portal that the NYS Department of Health has created.

Finally, employers must keep all records of hours worked by eligible employees and all other documents that prove bonus claims for at least six years. 

Are you looking for a one-stop source for information regarding all things HR and payroll? The Complete Payroll blog page is the place to go. With hundreds of up-to-date articles, we can guide you through even the most complicated laws and regulations. Check us out today!

DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting, or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.

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