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Upstate Minimum Wage to Increase from $12.50 to $13.20 at End of 2021

Minimum Wage Increase

Changes to Section 652 of the State Labor Law enacted in the 2016-17 State Budget increase the minimum wage to $15 across the state based on three regional phase-in schedules. The $15 wage has been in effect for large employers in New York City (NYC) since Calendar Year (CY) 2019 and since CY 2020 for small (i.e., with 10 or fewer workers) NYC employers. For Westchester, Nassau, and Suffolk counties, the final phase-in step will occur on Dec. 31, 2021, when the wage increases from $14 to $15. In all other counties of the state, the wage is headed for $15, but on a less predictable schedule. 

The legislation established an upstate minimum wage of $9.70 for CY 2017, which increased by 70 cents annually during the initial four years, reaching $12.50 for CY 2021. Starting with the CY 2022 minimum wage and going forward until the upstate wage reaches $15, the annual increases will be determined by the Director of the Division of the Budget (DOB) based on economic indicators. DOB recently released its analysis (available here), which resulted in the Department of Labor (DOL) issuing the minimum wage order specifying amounts for CY 2022 (available here).

Medicaid Minimum Wage Surveys

When the minimum wage increase legislation was enacted, the State indicated that Medicaid would cover what the Department of Health (DOH) considered to be allowed costs of minimum wage. These allowed costs are limited to those incurred by providers to increase wages to the new minimum wage for employees whose pay rates are below minimum wage at the time that the minimum wage increase takes effect. Increased costs of associated wage-sensitive benefits for such employees are also appropriate uses of minimum wage funding.

DOH circulates surveys in advance of each new CY collecting wage data from providers. This data is then used to gauge the need for minimum wage funding and to calculate minimum wage add-ons. The nursing home survey is currently underway, and other Medicaid providers should expect a survey before the end of the year. The Dear Administrator Letter (DAL) with a link to the nursing home survey (due Oct. 15th) is available here. Note that while the DAL indicates that nursing homes outside of NYC may complete the survey, the instructions for the survey seem to suggest that upstate providers need not complete the survey despite continuing increases to the upstate minimum wage until it reaches $15. In response to requests for clarification, DOH indicated that it would be back in touch with nursing home providers with an update once it had finalized guidance. While any provider may make the choice to opt out of the survey by simply completing a few required identifying questions, members should be certain that they will incur no minimum wage costs before opting out. Nursing homes operating entirely in NYC are indeed not required to complete the survey since the minimum wage in NYC is no longer increasing, having reached $15.

Organizations that do receive minimum wage funding should track and document their need and use of the funding. From the onset, DOH indicated that minimum wage funding might be subject to reconciliation. While no such reconciliation has yet been done for nursing homes, Managed Long Term Care (MLTC) plans undergo the process annually, and DOH has started reconciling 2017-2019 minimum wage funding for the Medicaid Assisted Living Program (ALP), although the process is currently on hold.

As soon as DOH provides any additional guidance, we will share it with members. In the meantime, please contact us if you have questions.

Contact: Ken Allison, kallison@leadingageny.org, 518-867-8820