As most employers know, for weeks, the New York State Legislature was considering passing a wage theft law (referred to as the “SWEAT” bill) that would have allowed alleged “victims” of wage theft to obtain a temporary lien against their employer’s (or alleged employer’s) assets upon the filing of a “wage claim.”
Yesterday’s publication of the Governor’s Budget kicks off what promises to be an exciting Budget season for anyone in healthcare. In no particular order, below are the Proposals contained in the Governor’s Memorandum in Support of the Health and Mental Hygiene sections of the Budget:
If you’d like to read up on any of these proposals, please review the Health Care Briefing Book and the full Budget Briefing Book. These will contain summaries of the Governor’s proposals.
We are reviewing the 1100 pages of proposed revisions to the law (see Bill Language) that would support the Governor’s plans and proposals and will discuss the details of the proposals with any clients who may have questions.
Responding to what is termed a lack of sufficient oversight of “unregulated” non-Article 28 practices and management services organizations, Governor Hochul proposed within her 2023-2024 Executive Budget submission legislation that would require certain transactions made related to these organizations to be reviewed and approved by the state Department of Health.
If enacted, the proposal would create Article 45-A of the Public Health Law entitled “Review and Oversight of Material Transactions” that would submit certain private equity supported practice transactions, private practice mergers and acquisitions, and management services organization (MSO) transactions to a new regulatory burden.
According to the legislation, much of the pretext for this action rests on concerns related to cost, access, quality, equity and competition held by state regulators and policy makers. It also likely results in part from years of intense lobbying by hospital interests as they seek to “level the playing field” concerning state approval differences between Article 28 and non-Article 28 practices. New York’s long-standing aversion to private-equity backed medical care may also play a role.
Specifically, the proposal targets “change of control” actions or what is termed “material transactions” related to MSOs that provide “all or substantially all administrative or management services under contract with one or more physician practice.” The bill language defines “material transactions” as mergers; acquisitions; affiliations; contracts or affiliations between a health care entity and a person; and the development of a “management services organization for the purpose of administering contracts with health plans, third-party administrators, pharmacy benefit managers, or health care providers.”
It is important to note that the proposal would also grant DOH the authority to unilaterally expand the definition of “material transaction” in the future.
Should this proposal become law, many currently unregulated routine transactions between private entities would be subject to state review and approval, including management contracts and asset acquisition contracts between MSOs and physician practices, and physician investments in an MSO.
The proposal, which closely mirrors laws recently enacted in Oregon, Washington and California, would require initiators of covered transactions to submit to DOH 30 days before the closing date of the transaction an application that includes: the purpose of the transaction; locations involved and subsequent impact thereon; a description of any service or plan participation elimination or reduction; copies of formal agreements; an analysis of the impact on cost, quality, access, equity, and competition; and a description of any commitments concerning expansion or health equity.
Should the information in the application meet the requirements, the application would be automatically approved at the conclusion of the 30-day review period. However, should DOH require additional information the application would pend until such time as DOH completes a more intensive review. At the conclusion of its review DOH may take any of the following actions:
Applicants should be aware that all information submitted through this process may be available to the public and in certain instances DOH may seek public comment concerning a given application.
Notably, the measure is not without teeth. Under its provisions DOH is authorized to impose a civil penalty of up to $10,000 per day for each day a transaction fails to comply, and/or pursue an injunction against any transaction failing to follow the application process.
While this is clearly a policy matter, it was nonetheless included within the comprehensive “Article 7” budget bill, which is one of several bills that collectively constitute the Executive Budget proposal. As such, the elimination or modification of its provisions is made more difficult within the context of the far more broad final budget negotiations between the Governor and the Legislature.
Interested parties are encouraged to contact their state lawmakers to express any concerns related to this proposal, including any deleterious impacts it would have on the ability to provide services in communities where needs are most acute.
The New York State Department of Labor (“DOL”) has published an updated model Sexual Harassment Prevention Policy. The proposed policy is subject to public comment until February 11, 2023, after which the DOL will adopt a final version of the policy.
By way of background, effective October 9, 2018, covered New York employers were required to adopt sexual harassment prevention policies that meet or exceed the minimum standards set forth in §201-g of the New York Labor Law, or adopt and disseminate the model policy published by the DOL. The Labor Law requires the DOL to review and revise its model policy every four years to account for changes in the law and workplace.
The following are the key proposed changes in the 2023 model policy:
Our firm is monitoring this development and will advise employers and clients of the new policy requirements once adopted by the DOL. As was the case with the first model sexual harassment policy, employers will have the option of either adopting the model policy or drafting an individual policy that meets or exceeds the minimum standards contained in the DOL’s final version model policy.
For any questions regarding this topic, please contact Poricanin Law.
The New York Department of Labor announced that it will release an updated Sexual Harassment Prevention Model Policy following a comprehensive effort to gather and review recommendations from stakeholders, including businesses around the State. Also according to the State, key updates to the new policy include:
Following the release of the policy, the DOL will begin a comment period.
New York employers will be required to adopt the new model policy once it is issued, and substitute it for the current policy they are utilizing OR update their currently policy to incorporate the newly required language.
We will monitor this issue and, once the new policy language is issued, work with clients to update their harassment policies and training program to correspond to the new policy requirements.
The impact of COVID-19 on the workplace was expected by many to generate a great deal of employment litigation. Those expectations unfortunately have been met as numerous cases have accrued across the nation based on various claims of discrimination and harassment in the context of a new COVID world.
The primary employment claim filed by plaintiffs alleges that the employer violated the Americans with Disabilities Act by failing to provide remote work as an accommodation to an employee’s alleged disability. The claims are based, in part, on the argument that the employees and remote work have proven effective during the pandemic and, thus, an employer would not suffer a hardship by making accommodations for employees who need to work from home due to medical issues or disabilities. These arguments may be sufficient to take the case past summary judgment, depending on the circumstances in the case. In overly simplified terms, an employer making a case for in-office work will need to establish how or why the allegedly disabled employee needs to be in the office to perform their job, and why a remote work arrangement is detrimental to the business. However, if the employee can perform the essential requirements of their job (and not every single task that the employee performs is considered essential), an employer will have a hard time prevailing.
In sum, COVID created the case for remote work for many employees who had, for years, sought to have a hybrid or remote work arrangement and many employees will utilize the pretense of a disability to secure such a work arrangement. Employers have to engage in the interactive process with any employee seeking an accommodation due to a disability, not just a remote work arrangement. This means that remote work requests cannot be outright dismissed because the Company refuses to make exceptions. Indeed, the essence of the Americans with Disabilities Act is an exception to ordinary policies and procedures in the interest of allowing a qualified disabled individual to work. It is only after the full and complete interactive process that employers can make a decision on employee’ remote work requests.
If you have questions about your obligations as an employer under the ADA, please reach out to Poricanin Law.
New York City recently launched a new program addressing wage and other employment issues specifically for the City’s domestic workers. The initiative, termed the “Domestic Worker Mediation Program,” will be overseen by the Center for Creative Conflict Resolution, which is part of the Office of Administrative Trials and Hearings.
According to a report by the New York City Department of Consumer and Worker Protection, there are as many as 18,000 domestic workers employed in New York City (e.g. housecleaners, nannies, or other care providers), and more than half have reported experiencing wage theft, leave violations, harassment, discrimination, and fear of retaliation from their employers.
The Mayor and other city officials believe the program will provide an option to resolve disputes in a manner that is less costly and complex than traditional litigation. The program’s services are free, confidential, and offered regardless of immigration status. If both the worker and employer agree to mediation, a neutral mediator will meet with the two parties to identify a resolution acceptable to both parties.
On December 7, 2022, President Biden signed the Speak Out Act into law. The law takes effect immediately and it limits the enforceability of pre-dispute nondisclosure and non-disparagement provisions relating to disputes involving sexual assault and sexual harassment. Thus, agreements in which employees agree to keep confidential any future sexual assault or harassment claims arising within their employment are unenforceable under the Act, as are general nondisparagement covenants to the extent they would limit an employee’s ability to comment on a sexual harassment dispute or a sexual assault dispute.
Employers should keep in mind, however, that in many jurisdictions there are already certain limits to nondisclosure provisions relating to claims of sexual harassment. For instance, Section 5-336 of the New York General Obligations Law prohibits employers from requiring a nondisclosure provision in any settlement agreement resolving claims of discrimination unless the condition of confidentiality is the complainant’s preference. Further, most employers only utilize nondisparagement and nondisclosure provisions arising or relating to sexual harassment in the context of a settlement or separation agreement, after a dispute arises. Thus, it is unlikely that the federal law signed by Biden, which prohibits pre-dispute agreements, would be triggered often for sexual harassment or assault matters.
Employers who may have questions about whether any nondisparagement and nondisclosure agreements currently utilized by their businesses violate the Speak Out Act should consult counsel, to ensure that their standard template documents are still compliant in view of this new law.
In August, the Department of Health (“DOH”) held a presentation for MLTCs regarding the State’s rate setting for Medicaid services. On one of the PowerPoint slides, the DOH noted that the minimum wage (“MW”) rate for upstate home care workers would be increased by an additional $.70 (on top of the $2.00 that was going into effect on October 1), effective as of December 31, 2022. This was the first indication of an upstate minimum wage increase and many providers took note of the $.70 notation and have been negotiating their rates with plans around a $.70 increase. However, as the Department of Labor has made clear several weeks ago, the $1.00 MW rate increase for upstate employers (in all industries) would be $1.00, and the DOL expects this $1.00 increase to be added onto the home care workers’ then-rate of $15.20. Thus, effective with hours worked on December 31, 2022 and until October 1, 2023, the MW for upstate home care workers will be $16.20.
The Home care worker minimum wage legislation that was passed earlier this year in April stated home care workers would receive $2.00 “in addition to the otherwise applicable minimum wage .” Effectively, this means that the $2.00 for home care workers is paid on top of whatever MW rate is then in effect for the New York region at issue. As providers probably have seen, the Upstate MW is going up from $13.20 to $14.20 on December 31, 2022 for all industries. Thus, on December 31, when the new upstate MW increases to $14.20, the $2.00 home care worker MW premium will be added onto that rate of $14.20, resulting in a new upstate MW rate of $16.20.
The State has published several MW posters which suggest that the DOL considers the new, higher, home care worker wage rates to be the “minimum wage.” This question is relevant to issues such as travel time pay, in-service pay and spread of hours. Thus, in accordance with the current interpretation of New York DOL, the MW for all home care intents and purposes would appear to be the new rate (inclusive of the $2.00 increase) and not the Statewide MW rate.
Please reach out to Poricanin Law if you have any questions about these minimum wage changes
A recent case reinforces the principle that employers may ultimately be held responsible for wage and hour errors, even when those errors are caused by a technology or payroll system error.
Earlier this month, United States District Judge Nelson Roman issued preliminary approval of a $12.75 million settlement stemming from the failure of PepsiCo and related companies to provide pay and overtime to 70,000 non-exempt employees. The failure was caused by a ransom ware attack sustained by payroll company Kronos, which is used by the plaintiffs. The attack, which took place between December 11, 2021 and February 12, 2022, caused massive data breaches, creating chaos in the plaintiffs’ payroll recording and reporting capabilities.
In response to the data losses, the plaintiff companies resorted to “imperfect” efforts to determine several subsequent payroll period obligations, e.g. calculating averages and other estimation techniques. According to documents filed with the court, the payroll system failure resulted in $23 million in underpayments and nearly $60 million in overpayments. The underpayments were corrected earlier this year by the employers, however it was too late to prevent the litigation from being filed by employees who were affected. As a result of the settlement, the defendant companies will pay $12.75 million to resolve the workers’ claims.
Employers are reminded of the prevalence of breaches, hacking schemes, and ransomware attacks and the importance of backing up data in the event that they need to pivot to an alternate method of processing payroll. For employers in home care, where payroll is largely done on a weekly basis (with some exceptions), and “late” payroll is considered a major wage and hour violation, it becomes even more important to have a back-up plan for payroll and wage compliance as part of the organization’s emergency preparedness program.