Home health care providers cautiously optimistic on $15 wage

When Gov. Andrew Cuomo and legislative leaders announced an agreement on the 2016-17 state budget, perhaps the most controversial part of the plan was a $15 minimum wage.

“There has been a lot of talk about raising the minimum wage and raising the minimum wage in and of itself is a very progressive, very fair initiative,” Cuomo said late Thursday in a press conference in the state Capitol. “The question is really the calibration of the increase in the minimum wage. If you increase it at the right rate, all experts will agree that it can be a positive for the economy overall.”

But employers who will feel the brunt of the wage hike, including home health care providers, have had a mixed reaction to the final budget deal. Home care representatives have offered support for a wage hike, but they have also questioned whether the state budget would allocate enough money to pay higher wages for workers at home care providers, many of whom get their funding from the state.

The budget does include a provision aimed at ensuring that home care providers can cover the costs of a higher minimum wage for their workers, some of whom are in relatively low-paying positions. Both houses agreed to include a “living wage” measure that would allocate state funding to help cover the increased costs.

“I think all our statements have said we support paying our workers more, however there needs to be Medicaid funding,” Laura Haight, vice president for public policy at the state Association of Health Care Providers, said on Friday afternoon after reviewing the final budget agreement. “Nobody could say they don’t deserve more, they work very hard. Certainly, they deserve more than fast food workers. Even if there weren’t that moral imperative to pay them more, there’s a business imperative, because when you have fast food workers making more money to do an easier job, it’s harder to recruit and retain good workers.”

A wage board created by Cuomo last fall announced it would raise the minimum wage for fast food workers across the state to $15 per hour.

Now, as part of the state budget, a minimum wage increase will begin Jan. 1, 2017 and will reach $15 an hour by the end of 2018 in New York City, according to Cuomo. Nassau, Suffolk and Westchester counties will reach $15 on Dec. 31, 2019, and the rest of the state will reach $12.50 on Dec. 31, 2020. At that time, the state Division of the Budget will decide whether to continue to increase to $15 on an indexed schedule.  

When asked about the impact the higher minimum wage would have on nonprofit organizations, Cuomo downplayed the issue, saying that they can apply for hardship exceptions. The governor also cited high salaries for some nonprofit CEOs, suggesting they could handle paying their workers more.

However, home care providers do not qualify as nonprofits, another official with the state Association of Health Care Providers noted.

“We are not nonprofits and we do not contract with the state so his language regarding hardship exemption doesn’t apply to us," said Jessica Collier, the organization’s senior associate for public policy. "We are approximately 90% Medicaid funding and we do not set our rates." 

Haight added, “The goal here is admirable, the risk are very high and I think that we’re just going to move forward in hopes that it’s responsibly funded and the funding comes through with sufficient lead time that the home care agencies actually have the money to pay workers.”

In the Assembly’s one-house budget, the minimum wage language updated the "living wage" provision for home health aides to make sure that such workers were included.

That language was initially left out of the final budget bills, according to a legislative source, but once the mistake was noticed early Friday morning the state Senate Finance Committee met and approved a bill that made sure this provision was included as part of the final spending package. The same bill was expected to pass the Assembly Friday when the house returns to pass the remaining spending bills in the state budget. The state Senate worked through the night to pass the entire state budget.

“We’ll remain concerned, because if (the higher minimum wage) isn’t implemented properly, there could be serious if not devastating consequences,” Haight said. “But, we certainly appreciate that the budget recognizes that there is a need to fund Medicaid providers for the minimum wage increase. That’s a good starting off point and we start off with a perspective that there is a need to pay our workers more, so hopefully working together we can successfully implement this new program.”