Health Care Minimum Wage Delayed!

Many employees in the healthcare industry have been looking forward to (and employers have been bracing for) minimum wage increases, which were due to take effect in June. However, at the eleventh hour, the Legislature passed SB 828, granting employers an additional month—until July 1, 2024 to comply. All future increases will also occur on July 1, rather than June 1.

Keep reading for some important details!

Which Employers and Employees are Covered?

This new law applies to virtually every medical employer, except hospitals under the State Department of State Hospitals, tribal clinics exempt from licensure, and outpatient settings operated by tribal organizations. Some examples include facilities or work sites part of an integrated health care facility system, licensed general acute care hospitals, special hospitals, clinics, physician groups and many more! (Note that most dental offices would not be included, unless they fall under one of the covered groups, such as an integrated health care system.)

Moreover, not just nurses and doctors would be entitled to the minimum wage increases. A variety of employees working for covered employers would qualify, including technicians, janitors, housekeeping staff, groundskeepers, guards, clerical workers, billers, and more. There are limited exceptions for outside salespeople, and certain public sector employees and medical transportation service workers.

Does the Law Impact Exempt Employees?

Actually, yes! To remain classified as exempt, covered health care employees must earn a monthly salary of 1.5 times the applicable healthcare minimum wage, or 2 times California’s minimum wage, whichever is greater. This means that covered employers must continue to recalculate the minimum exempt salaries as the health care and California’s minimum wages continue to increase.

What are the Deadlines?

Type of Employer	Deadlines
Large Employers & Integrated Health Care Systems To determine if you qualify, refer here.	July 1, 2024: $23/hour July 1, 2025: $24/hour July 1, 2026*: $25/hour *Until otherwise adjusted
Hospitals To determine if you qualify, refer here.	July 1, 2024: $18/hour, with 3.5% increases annually July 1, 2033*: $25/hour *Until otherwise adjusted
Clinics	July 1, 2024: $21/hour July 1, 2026: $22/hour July 1, 2027*: $25/hour *Until otherwise adjusted
All Other Health Care Facilities	July 1, 2024: $21/hour July 1, 2026: $23/hour July 1, 2028*: $25/hour *Until otherwise adjusted

Covered health care employers who are county-owned, affiliated, or operated are not required to comply until 2025.

What Do We Do Next?

• Upon the effective date, update your payroll system.
• Notify your non-exempt employees within seven calendar days of the change (or earlier). Employers may do this by updating the Wage Theft Form and retaining a copy for the employee’s personnel file.
• Ensure your wage statements reflect the correct pay rates, including overtime rates.
• If the change impacts your pay scales, including for job postings, be sure to update those as well.
• Consider any personnel restructuring and/or shift adjustments as needed.
• For questions regarding waivers, it is advised to consult legal counsel.

Wage and hour compliance on the mind? CEA members can consult with our HR advisors by calling 800.399.5331!