As part of the New York State enacted budget for the 2023 Fiscal Year, the Legislature and Governor provided bonuses for certain healthcare and mental hygiene workers, pursuant to New York Social Services Law Section 367-w. The State Budget for the 2023 Fiscal Year includes $1.2 billion dedicated to these bonuses.

The purpose of the new law is to recruit, retain, and reward healthcare and mental hygiene workers. As Governor Kathy Hochul stated, “New York depends on a strong, stable and equitable health care system and at the very foundation are the industry’s workers, who’ve been asked to do the impossible and are continuing to do so two years after the start of the pandemic.”

Pertinent to educational institutions, Social Services Law Section 367-w bonuses apply to certain employees in P-12 public and non-public schools, charter schools, BOCES, preschool programs for students with disabilities and institutions of higher education, including therapists (e.g. occupational and physical) and assistants and aides to those therapists, speech language pathologists, nurses (i.e. RN and LPN), nursing assistants, medical assistants and healthcare support workers. Additional guidance is needed to clarify whether or not school counselors and social workers in a school setting (LCSW and LMSW) are eligible employees under the statute. These employees may be full-time, part-time, on a salaried, hourly, or temporary basis, or an independent contractor, as long as their annualized base salary before bonuses and overtime pay is $125,000 or less. They must also be employed continuously for at least six months between October 1, 2021 and March 31, 2024. Employers must track and report their employees to New York state within 30 days of eligibility via a form that will be created by the New York Commissioner of Health.

Bonus payments will begin in 2023 for eligible employees of educational institutions, subject to federal financial approval, as applicable, and cannot offset wages already due.

Bonuses will range from around $500 to $1,500 per vesting period, based on the average number of weekly work hours during the vesting period. Use of leave time and accruals, including unpaid leave under the Family and Medical Leave Act, must be credited towards and included in the calculation of the average number of hours worked per week over the course of the vesting period. The law sets a maximum of two vesting periods per employer. There will be a $500 bonus per vesting period for employees working 20-30 hours per week, a $1,000 bonus for employees working 30-35 hours per week, and a $1,500 bonus for employees working 35 hours or more per week. An employee may not receive more than a total of $3,000 in bonus payments across all employers. Employers must make these payments to their employees within 30 days after the bonus is paid to the employers. Vesting schedules and payment schedules will be issued by the Commissioner of Health.

Employers must maintain records of these payments for six years, which may be audited. If employers fail to make appropriate bonus payments, claims a bonus not due, or claims a bonus in excess of the amount due, it may be subject to reimbursement requirements and/or penalties.

If you have any questions, please contact the Harris Beach attorney with whom you usually work.

This alert is not a substitute for advice of counsel on specific legal issues.

Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, New York City, Rochester, Saratoga Springs, Syracuse, Uniondale and White Plains, as well as Washington D.C., New Haven, Connecticut and Newark, New Jersey.