New York Wage Parity Compliance: Oct. 1, 2026, AUP Deadline and Multiyear Requirements

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The New York State Department of Health recently issued sweeping changes to wage parity compliance affecting licensed home care services agencies (LHCSAs), certified home health agencies (CHHAs), fiscal intermediaries and Medicaid managed care organizations. Under this guidance, LHCSAs, fiscal intermediaries and CHHAs must support Department of Labor Form LS301, the Employer’s Statement Verifying Wage Parity Hours and Expenses, through agreed-upon procedures (AUPs) established by the Department of Health and Department of Labor and performed and reported on by an independent certified public accountant (CPA).

The AUPs covering years 2021 through 2025 must be completed and certified by an independent CPA by October 1, 2026, and annually thereafter, with each October 1 submission covering the prior calendar year.

These requirements apply to downstate wage parity regions, including New York City and the surrounding counties subject to wage parity law. For organizations that have not fully prepared support for prior years, this creates a significant multiyear effort to compile payroll data, reconcile reported amounts and ensure documentation is complete and defensible under independent testing.

At PKF O’Connor Davies, we help both audit and non-audit clients assess what has already been filed, organize the required support and perform the AUPs needed to meet the state’s expectations.

What Has Changed

The New York State Department of Health has updated wage parity compliance requirements and submission timelines for LHCSAs, CHHAs, fiscal intermediaries and Medicaid managed care organizations.

For 2025 reporting:

• LS300 submissions are due as early as April 30, 2026.
• Annual certifications are due May 31, 2026.

Looking forward, organizations must align to a recurring compliance cycle:

• June 1: LS300 submission
• October 1: LS301 and supporting report
• December 1: Annual certification

The LS301 Requirement Is the Real Shift

LS301 is now part of the recurring compliance process and must be supported by an independent accountant’s report.

This means:

• Providers are still required to complete LS301.
• LS301 must be supported by an independent accountant’s report.
• In most cases, that support will come through an AUP engagement.

For most organizations, this will require going back and gathering support for prior years, including 2021 through 2025. This creates a retroactive compliance burden that many organizations have not fully planned for.

Understanding Agreed-Upon Procedures (AUPs)

AUPs are engagements performed by an independent CPA under standards established by the American Institute of Certified Public Accountants (AICPA).

These procedures are not high-level. They require detailed testing of:

• Payroll records and wage parity hours.
• Employee-level data and sampling.
• Wage parity calculations across base pay, additional wages and supplemental benefits.
• Reconciliation to the general ledger and supporting documentation.

The complexity of the AUP depends heavily on how wage parity is satisfied:

• If met through base wages, testing is more straightforward and payroll-driven.
• If met through supplemental benefits such as pensions, education or shift differentials, testing expands significantly to include policy review, calculation validation and compliance assessment.

Why the Future Requirement Changes Everything

For 2021–2025, AUPs can be performed at the agency level. Beginning in 2027 for calendar year 2026, LHCSAs, CHHAs and the statewide fiscal intermediary will be required to obtain contract-level support for each contract in place with a Medicaid managed care organization or a CHHA.

This is a fundamental shift. Contract-level reporting will require segmented data, contract-specific tracking and more complex reconciliation and documentation.

Organizations that do not begin preparing now will face a compressed and costly transition later.

Additional Considerations Organizations Are Facing

• Ownership changes: Responsibility for LS300 and LS301 reporting remains with the owner of the agency during each reporting year.
• Data readiness: Many organizations do not yet have payroll and benefit data structured to support AUP-level testing.
• Process gaps: Wage parity is still often handled as a year-end exercise rather than a controlled, ongoing compliance process.

How We See It

This is a shift toward a more disciplined and supportable wage parity compliance model. The state is clearly moving toward increased transparency, consistency and auditability.

The organizations that succeed will treat this as an operational initiative, not just a reporting requirement.

How PKF O’Connor Davies Can Help

PKF O’Connor Davies can perform the following procedures for both audit and non-audit clients:

• Perform AUPs to support LS301 compliance.
• Interpret wage parity requirements and Department of Health guidance.
• Identify gaps in payroll, benefits and documentation before they become reporting issues.
• Prepare and support LS300 and LS301 reporting processes.
• Plan for the increased complexity of contract-level requirements beginning in 2026.

Contact Us

The urgency is real. The deadlines are here and the complexity is increasing. Organizations that act now will be in control. Those who wait will be reacting under pressure, with less flexibility to resolve issues and significantly higher execution risk.

If you have any questions or need assistance, please contact your PKF O’Connor Davies client service team or:

Keith Solomon, CPA
Partner, Health Care Practice Leader
ksolomon@pkfod.com

Dorothea A. Russo, CPA
Partner
drusso@pkfod.com