UPDATE 07/01/ 2024: The previous effective date of July 1, 2024 for an increase in the California health worker minimum wage is void. Per the terms of an agreement between state legislators and the governor, the state’s health worker minimum wage will be delayed until at least October 15, 2024. The increase will only take effect if state revenue between July and September is at least 3% higher than expected under existing projections. If state revenue does not rise to this threshold level, the effective date of the minimum wage increase will be pushed back further to January 1, 2025
UPDATE: On Friday, May 31, the California Governor signed into law a one-month delay in the effective date of the healthcare minimum wage increase originally meant to take effect June 1. The new effective date of the increase will be July 1, 2024, and any June 1 dates for incremental minimum wage increases in the law will be changed to July 1. This bill is effective immediately.
An increase to the statutory minimum wage for health care workers in California will go into effect June 1, 2024. Simultaneously the definition of “health-care” positions subject to the increase will be greatly expanded. The intended goal of the changes is to help solve the shortage of health-care workers in the state, but the law does increase the financial burden on employers in the field.
What employers are subject to the increase?
- A facility or other work site that is part of an integrated health-care delivery system
- Licensed general acute-care hospitals
- Licensed acute psychiatric hospitals
- Special hospitals
- Licensed skilled nursing facilities, if owned, operated or controlled by a hospital or integrated health-care delivery system or health-care system
- Patients’ homes when health-care services are delivered by an entity owned or operated by a general acute-care hospital or acute psychiatric hospital
- Licensed home health agencies
- Clinics, including specialty-care clinics, dialysis clinics, psychology clinics, outpatient clinics, clinics operated or affiliated with any institution teaching a recognized healing art, and/or nonprofit clinics that conduct medical research and health education and provide health care to its patients through a group of 40 or more physicians and surgeons, who are independent contractors representing not less than 10 board-certified specialties, and not less than two-thirds of whom practice on a full-time basis at the clinic
- Licensed residential-care facilities for the elderly, if affiliated with an acute-care provider or owned, operated or controlled by a general acute-care hospital, acute psychiatric hospital or the parent entity of a general acute-care hospital or acute psychiatric hospital
- Psychiatric health facilities
- Mental-health rehabilitation centers
- Community clinics, intermittent clinics or publicly operated clinics
- Rural health clinics
- Urgent care clinics
- Ambulatory surgical centers
- Physician groups
- County correctional facilities that provide health-care services
- County mental-health facilities
What employees are subject to the increase?
- An employee of a health-care facility employer who provides patient care, health-care services, or services supporting the provision of health care, which includes, but is not limited to, 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.
- It could also include a contracted or subcontracted employee when:
- The employee’s employer contracts with the health-care facility employer, or with a contractor or subcontractor to the health-care facility employer, to provide health-care services or services supporting the provision of health care, and
- The health-care facility employer, directly or indirectly, or through an agent or any other person, exercises control over the employee’s wages, hours or working conditions. However, “covered health-care employee” includes all employees performing contracted or subcontracted work primarily on the premises of a health-care facility to provide health-care services or services supporting the provision of health care.
How does the law change nonexempt status?
The law also increases the salary threshold for health-care workers to be deemed exempt from minimum wage and overtime requirements. Health-care workers must now earn a monthly salary of no less than 150% of the health-care worker minimum wage or 200% of the state minimum wage for all workers, whichever is greater, in order to be considered exempt.
When does the law take effect, and for whom?
- Increases to both the minimum wage and the exempt salary base are done incrementally according to the size of the health-care employer.
- The following are the four tiers of employers subject to different timing requirements:
| Large employers and integrated health systems | Defined as covered health-care facilities that: (1) have 10,000 or more full-time equivalent employees; (2) are part of an integrated health-care delivery system or health-care system with 10,000 or more full-time equivalent employees; (3) dialysis clinics; (4) or facilities owned, affiliated or operated by a county with a population of more than 5,000,000 as of Jan. 1, 2023 |
| Step-up period | Hourly minimum |
| June 1, 2024 to May 31, 2025 | $23/hr |
| June 1, 2025 to May 31, 2026 | $24/hr |
| June 1, 2026 and after | $25/hr |
| Hospitals | Defined as any hospital that (1) has a high governmental payor mix; (2) is an independent hospital with an elevated governmental payor mix; (3) is a rural independent covered health-care facility; or (4) is a covered health-care facility that is owned, affiliated or operated by a county with a population of less than 250,000 as of Jan. 1, 2023 |
| Step-up period | Hourly minimum |
| June 1, 2024 to May 31, 2033 | $18/hr with 3.5% increases annually |
| June 1, 2033 and after | $25/hr |
| Clinics | Defined as clinics, including: (1) primary care clinics, (2) non-governmental free clinics; (3) community clinics and any associated intermittent clinic; (4) rural clinics; and (5) urgent- care clinics owned and/or affiliated with community or rural- care clinics |
| Step-up period | Hourly minimum |
| June 1, 2024 to May 31, 2026 | $21/hr |
| June 1, 2026 to May 31, 2027 | $22/hr |
| June 1, 2027 and after | $25/hr |
| All other health-care facilities | Defined as any covered health-care facility not listed above |
| Step-up period | Hourly minimum |
| June 1, 2024 to May 31, 2026 | $21/hr |
| June 1, 2026 to May 31, 2028 | $23/hr |
| June 1, 2028 and after | $25/hr |
The information provided in this document does not, and is not intended to, constitute legal advice. Instead, all information, content and materials available here are for general informational purposes only. If you require legal advice, we strongly recommend that you consult with a qualified attorney. Only your individual attorney can provide personalized advice tailored to your specific situation and jurisdiction. This document should not be relied upon as a substitute for professional legal counsel.