On May 31, 2024, the Governor of California signed into law (Senate Bill 828) which delays the implementation of California's health care worker minimum wage law by one month from June 1, 2024 to July 1, 2024. The original law required covered health care employees to be paid a minimum of between $18 and $23 per hour depending on the type of facility between June 1, 2024 and May 31, 2025.
Background:
On October 13, 2023 California enacted Senate Bill 525 (SB 525) which establishes a tiered minimum wage rate system for healthcare workers.
The scope of SB 525 is extensive and includes nearly all healthcare facilities operating in California including hospitals, licensed skilled nursing facilities, licensed home health agency, and all types of clinics (e.g.; medical, psychology, urgent care).
However, SB 525 does not cover hospitals owned, controlled, or operated by the Department of State or tribal clinics exempt from licensure, or an outpatient setting conducted, maintained or operated by a federally recognized Indian tribe, tribal organization or urban Indian organization.
The workers covered under SB 525 include employees performing work in the occupation of a nurse, physician, caregiver, medical resident, intern or fellow, patient care technician, janitor, housekeeping staff person, groundskeeper, guard, clerical worker, nonmanagerial administrative worker, food service worker, gift shop worker, technical and ancillary services worker, medical coding and medical billing personnel, scheduler, call center and warehouse worker, and laundry worker, regardless of formal job title.
Note: SB 525 includes certain carve-outs and does not apply to:
· Employment as an outside salesperson;
· Any work performed in the public sector where the primary duties performed are not healthcare services;
· Delivery or waste collection work on the premises of a covered healthcare facility, provided that the delivery or waste collection worker is not an employee of any person that owns, controls or operates a covered healthcare facility; or
· Medical transportation services in or out of a covered healthcare facility, provided that the medical transportation services worker is not an employee of any person that owns, controls or operates a covered healthcare facility.
Impact of Senate Bill 828
As noted above, the enactment of Senate Bill 828 delays the implementation of the health care worker minimum wage increases for one month, specifically from June 1, 2024, to July 31, 2024. Other than the effective dates, all other provisions of the original legislation via SB 525 remain in effect.
Revised Changes to Minimum Wage Effective Dates
The changes to the minimum wage per hour under SB 828 begin on July 1, 2024, and are dependent on the different categories of healthcare facilities:
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Healthcare Facility Category
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July 1, 2024, to June 30, 2025
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July 1, 2025, to June 30, 2026
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July 1, 2026
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Further Adjustments
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Covered healthcare facility employer: (i) with 10,000+ full-time equivalent employees; (ii) that is a part of an integrated healthcare delivery system or healthcare system with 10,000 or more full-time equivalent employees; (iii) that is a dialysis clinic or that is a person that owns, controls or operates a dialysis clinic; or (iv) that is owned, affiliated or operated by a county with a population of more than 5,000,000 as of January 1, 2023
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$23.00
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$24.00
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$25, until adjusted
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To be determined
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Hospital with a high governmental payor mix, independent hospital with an elevated governmental payor mix, a rural independent covered healthcare facility, or a covered healthcare facility that is owned, affiliated, or operated by a county with a population of less than 250,000 as of January 1, 2023
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$18.00
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$18.63
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$19.28 (plus 3.5% increases annually)
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$25.00 beginning July 1, 2033
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Clinics as defined in Section 1206(h) not operated or affiliated with a clinic described in Section 1206(b), community clinics licensed under Section 1204(a) and any associated intermittent clinic exempt from licensure under Section 1206(h), a rural health clinic that is not license-exempt, or an urgent care clinic owned and affiliated with such community or rural health clinic.
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$21.00
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$21.00
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$22.00
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$25.00 beginning July 1, 2027
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Other covered healthcare facilities (including licensed skilled nursing facilities
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$21.00
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$21.00
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$23.00
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$25.00 beginning July 1, 2028
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Next Steps:
Healthcare facility employers in California should review (Senate Bill 828) with legal counsel to determine what category their organization falls under and pay employees as required.
Have Questions?
Please contact your dedicated service professional with any questions.