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Health Care Raises Delayed Again!

Posted by Giuliana Gabriel, J.D., HR Compliance Director on July 1, 2024

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Employees in the healthcare industry have been waiting for minimum wage increases, which were originally due to take effect in June. Then, the Legislature pushed that deadline to July 1 to align with the State’s budget. Now, they’ve been delayed yet again.

The health care minimum wage raises may now take effect as of October 15, 2024, but that is only if California’s revenues are at least 3% higher than what officials have estimated for the period of July through September. Otherwise, the raises will get pushed to January 1, 2025.

For additional details on the law, keep reading:

Who Does This Law Impact?

SB 525 applies to virtually every medical employer, except:

  • hospitals under the State Department of State Hospitals
  • tribal clinics exempt from licensure
  • outpatient settings operated by tribal organizations

Some examples of covered businesses 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.)

A variety of employees working for covered employers qualify, including nurses, doctors, 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 Salaried 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.

Initial Deadlines: To Be Determined

Type of Employer Deadlines
Large Employers & Integrated Health Care Systems

To determine if you qualify, refer here.
  • October 15, 2024 OR January 1, 2025: $23/hour
Hospitals

To determine if you qualify, refer here.
  • October 15, 2024 OR January 1, 2025: $18/hour
Clinics
  • October 15, 2024 OR January 1, 2025: $21/hour
All Other Health Care Facilities
  • October 15, 2024 OR January 1, 2025: $21/hour

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

What Do We Do Next?

  • On the effective date, update your payroll system.
  • Notify your non-exempt (hourly) 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!