New York Health Care and Mental Hygiene Worker Bonus Program

At A Glance

• Effective September 2, 2022
• New York Employers are required to provide a bonus to eligible Health Care and Mental Hygiene workers between 2022 and 2024.
• Additional resources are available on the NY Department of Health website.

What is the New York HWB Provision?

On August 2, 2022, New York Governor Kathy Hochul announced the launch of the New York State Health Care and Mental Hygiene Worker Bonus program (NYS HWB).

The new HWB provision is authorized under part ZZ of New York's 2022-2023 Enacted Education, Labor, Family Assistance, Health, and Mental Hygiene bill. The HWB program allows for the payment of bonuses to “recruit, retain, and reward health care and mental hygiene workers” meeting certain eligibility requirements.

Bonuses for employees will be determined by specific "vesting periods," or hours worked during a consecutive six-month period between October 1, 2021, through March 31, 2024.

Eligible employers are required to request and provide bonuses for eligible workers.

The Governors full statement can be found here.

Eligibility

Employer Eligibility

Eligible employers are those that employ at least one person and meet one or more of the following criteria:

• Bill for services under a Medicaid state plan or a home or community-based services (HCBS) waiver
• Bill for Medicaid services provided or arranged through a managed care organization or a managed long term care plan
• Are educational institutions and other funded programs

Additionally, providers are qualified employers so long as the employer meets the 20% Medicaid threshold.

An employer must be currently enrolled and payable through eMedNY and have an active MMIS ID to be able to submit on the HWB Program Portal. Providers who are not currently enrolled with eMedNY should visit the eMedNY website to learn more about how to enroll.

Employee Eligibility

Employees must be in an eligible position, make less than $125,000 annually, be employed by the employer during the entire vesting period, work the required number of hours (a minimum of 20 per week), and not be suspended or excluded from participation in the Medicaid program. Eligible employees must receive a W-2 to report supplemental wages.

Eligible employees of an eligible employer may receive bonuses every 6 months through May 1, 2024. Qualified employees who work:

• At least 20 hours but no more than 30 hours per week are eligible for a bonus of $500.
• At least 30 hours but no more than 35 hours per week are eligible for a bonus of $1,000.
• At least 35 hours per week are eligible for a bonus of $1,500.

Attestation Requirements

Employees and employers must both complete the attestation forms provided on the HWM portal. Employers must retain copies of the employee attestation form, which may be submitted electronically. The employee will need the MMIS or SFS number to complete the attestation form and a valid SSN or ITIN.

Employers must submit their attestation form by the Employer submission close date. The state will grant the bonus amounts to the employer, which must be paid to eligible employees within 30 days, and will refund FICA and payroll tax reimbursement.

Bonus Taxability

The amount received by the eligible employee is not taxable for New York state or local income tax. The bonus is not considered taxable income for New York income tax. Federal and other state taxes are not exempt from the bonus payment. The Hygiene Worker Bonus (HWB) bonus payments made to eligible employees who live out-of-state are exempt from New York income taxes.

Form IT-225, New York State Modifications, will contain a subtraction modification to account for the HWB bonus. Due to NYS requirements, Box 1 and Box 16 of the W2 must match. The bonus amount should be identified on Box 14 of the W2.

For more information on New York's wage and payroll tax laws, check out our New York Wage and Payroll Tax Facts page.

Next Steps

The New York Department of Health has multiple resources available including an FAQ, that employers should review on their website. This information includes the vesting period information, as well as eligible job titles.

Additional resources, and any additional information made available, will be ready for Paylocity clients in the Paylocity Knowledge Base, PEAK.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner.

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.