In 2023, Governor Gavin Newsom signed SB 525, which required certain health care facilities to pay a special minimum wage to their employees starting June 1, 2024. Then, on certain subsequent June 1, that minimum wage would incrementally increase before eventually following an annual consumer price index adjustment in line with California’s standard minimum wage. Due to California’s budgetary issues, on May 31, 2024, Governor Newsom signed SB 828, a budget trailer bill that pushes the effective date back to July 1, 2024, and changes the date of subsequent increases to July 1, as appropriate. No other changes to SB 525’s health care worker minimum wage law were made.
In SB 525, the health care worker minimum wage covers 20 different types of health care facilities:
- A facility or other work site that’s part of an integrated health care delivery system.
- A licensed general acute care hospital, as defined in subdivision (a) of Section 1250 of the Health and Safety Code, including a distinct part of any such hospital.
- A licensed acute psychiatric hospital, as defined in subdivision (b) of Section 1250 of the Health and Safety Code, including a distinct part of any such hospital.
- A special hospital, as defined in subdivision (f) of Section 1250 of the Health and Safety Code.
- A licensed skilled nursing facility, as defined in subdivision (c) of Section 1250 of the Health and Safety Code, if owned, operated or controlled by a hospital or integrated health care delivery system or health care system.
- A patient’s home when health care services are delivered by an entity owned or operated by a general acute care hospital or acute psychiatric hospital.
- A licensed home health agency, as defined in subdivision (a) of Section 1727 of the Health and Safety Code.
- A clinic, as defined in subdivision (b) of Section 1204 of the Health and Safety Code, including a specialty care clinic or a dialysis clinic.
- A psychology clinic, as defined in Section 1204.1 of the Health and Safety Code.
- A clinic as defined in subdivision (d), (g) or (l) of Section 1206 of the Health and Safety Code.
- A licensed residential care facility for the elderly, as defined in Section 1569.2 of the Health and Safety Code, 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.
- A psychiatric health facility, as defined in Section 1250.2 of the Health and Safety Code.
- A mental health rehabilitation center, as defined in Section 5675 of the Welfare and Institutions Code.
- A community clinic licensed under subdivision (a) of Section 1204 of the Health and Safety Code; an intermittent clinic exempt from licensure under subdivision (h) of Section 1206 of the Health and Safety Code; or a clinic operated by the state or any of its political subdivisions, including, but not limited to, the University of California or a city or county that is exempt from licensure under subdivision (b) of Section 1206 of the Health and Safety Code.
- A rural health clinic, as defined in paragraph (1) of subdivision (l) of Section 1396d of Title 42 of the United States Code.
- An urgent care clinic that provides immediate, nonemergent ambulatory medical care, including but not limited to walk-in clinics or centers.
- An ambulatory surgical center that is certified to participate in the Medicare Program under Title XVIII (42 U.S.C. Sec. 1395 et seq.) of the federal Social Security Act.
- A physician group operating as a medical group practice, a corporation controlled by physicians and surgeons, or a medical partnership with 25 or more physicians.
- A county correctional facility that provides health care services.
- A county mental health facility.
The health care worker minimum wage doesn’t cover any facilities not identified above so those facilities must follow the standard California minimum wage for their nonexempt employees.
Those facilities identified above must provide a different, specific minimum wage to their nonexempt “covered health care employee.” The definition of “health care employee” is incredibly broad — including “an employee of a health care facility employer who provides patient care, health care services, or services supporting the provision of health care.” This definition includes employees performing work, regardless of formal job title, in the occupation of:
- 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 billing personnel;
- Scheduler;
- Call center and warehouse worker; and
- Laundry worker.
In other words, basically all employees working for a covered health care facility whether they are directly providing health care services or not.
In addition, “covered health care employees” includes workers that meet both of the following:
- 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.
- 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.
Finally, “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.
The health care worker minimum wage has four schedules depending upon the facility type that vary between $18 to $23 per hour that starts on July 1, 2024.
Lastly, the health care worker minimum wage alters how exempt covered health care employees are paid. Unlike the state law where an exempt employee is paid a salary at the equivalence of two times the standard statewide minimum wage, exempt covered health care employees must be paid the higher of either two times the standard statewide minimum wage or 1.5 times the applicable health care worker minimum wage.
Employers who are unsure whether their facilities fall within the list above should urgently consult with legal counsel to prepare for the impending July 1 effective date.
Matthew J. Roberts, Associate General Counsel, Labor and Employment
CalChamber members can read more about Wage and Hour Requirements for Specific Industries in the HR Library. Not a member? Learn how to power your business with a CalChamber membership.
