Recent legislation in California has brought significant changes to the minimum wage for health care workers. Laws SB 525, SB 828, and SB 159 have amended the Labor Code, introducing sections 1182.14, 1182.15, and 1182.16 to increase the minimum wage for employees at specific health care facilities. This change officially took effect on October 16, 2024, following a notification from the California Department of Health Care Services (DHCS). This article addresses frequently asked questions to clarify who is affected and what these changes mean for health care professionals and support staff.
Please note: This information is for general guidance only and not legal advice.
Understanding the New Health Care Minimum Wage Law
- What is the legislation behind the health care worker minimum wage increase?
California Senate Bills 525, 828, and 159 are the legislative acts that have led to the new health care worker minimum wage law. These bills have updated the Labor Code to include sections 1182.14, 1182.15, and 1182.16, which mandate higher minimum wages for workers at certain health care employers. To be eligible, workers must be employed by a “health care facility” as defined in the law and provide health care services or support the delivery of health care. The law became effective on October 16, 2024.
Who Qualifies for the Increased Minimum Wage?
- Which health care workers are covered under this new law?
The law covers employees of specific health care facilities (detailed in questions 3-8 below) who are involved in providing health care services or in roles that support health care provision. This includes patient care and services that facilitate patient care.
- Which types of health care facilities are mandated to pay the higher minimum wage?
The law specifies several categories of health care facilities that must comply with the new minimum wage standards:
- Hospitals and Integrated Systems: This includes general acute care hospitals offering comprehensive services like medical, surgical, and emergency care, as well as acute psychiatric hospitals for mental health care. Coverage extends to workers providing hospital services in patients’ homes.
- Psychiatric Health Facilities: These facilities offer 24-hour inpatient care for mental health conditions, including services like psychiatry and rehabilitation. A complete list of licensed Psychiatric Health Facilities is publicly accessible.
- Residential Care Settings: This category includes skilled nursing facilities linked to hospitals or integrated health systems, and residential care facilities for the elderly that are affiliated with acute care providers. It also covers licensed home health care agencies.
- Physician Groups: Medical practices or partnerships with 25 or more physicians are included.
- County Facilities: County mental health facilities and county correctional facilities (jails) providing health care services are covered.
- Mental Health Rehabilitation Centers: Licensed Mental Health Rehabilitation Centers also fall under this law.
- Outpatient Clinics: Various outpatient clinics are included, such as dialysis clinics, psychology clinics, surgical clinics/ambulatory surgical centers (Medicare-certified), urgent care clinics, rehabilitation clinics, and alternative birth centers.
- Clinics Operated by Public Entities: Clinics run by cities, counties, the University of California, or hospital systems are covered. Teaching clinics affiliated with educational institutions in health professions are also included.
- Primary Care Clinics: Nonprofit clinics offering health care, research, and education with a significant number of physicians, rural health clinics, and community or intermittent clinics are also mandated to pay the increased minimum wage.
For detailed verification of health care facility types, the California Department of Public Health’s Cal Health Find Database is a useful resource.
- What if my health care work is not within these listed facilities? Am I still eligible for the new minimum wage?
No. The increased minimum wage applies exclusively to health care workers providing services within the covered health care facilities listed. For example, employees of smaller physician groups (less than 25 physicians) not meeting the criteria are not covered. Additionally, health care facilities operated by the State of California itself are excluded, while facilities run by political subdivisions like counties or the University of California system are included.
- Are workers in skilled nursing facilities not connected to hospitals included?
Currently, no. The minimum wage increase for workers in skilled nursing facilities not owned or operated by hospitals is contingent on the implementation of a patient care minimum spending requirement. This requires further legislative action.
- Do employees at congregate living health facilities receive the health care minimum wage?
No, congregate living health facilities are not covered. These facilities offer less intensive care than hospitals but more than skilled nursing facilities, typically in smaller, home-like settings.
- Are employees of independent practice associations covered?
No, unless the independent practice association falls under a covered facility category as described earlier.
- What about employees in outpatient private practice physical therapy clinics?
Employees in standalone outpatient physical therapy clinics not associated with covered health care facilities are generally not covered, unless the clinic itself qualifies as a covered facility type.
- What constitutes “health care services” or “services supporting health care provision”?
These terms encompass a broad range of roles, including direct patient care services like nursing and caregiving, services by medical residents, and support services such as technical and ancillary services, janitorial and housekeeping work, groundskeeping, security, clerical work in business offices, food services, laundry, medical coding and billing, call center operations, warehouse duties, scheduling, and even gift shop staffing within these facilities. Eligibility for the health care minimum wage depends on performing these services within a covered health care facility.
- Are employees of contractors or subcontractors working in covered facilities included?
Yes, under certain conditions. Employees of contractors or subcontractors are covered if they provide health care services or support services within a covered health care facility, and if the facility acts as a joint employer or if the worker spends more than 50% of their work hours at the covered facility in a workweek.
- If I work as a janitor in both covered and non-covered health care facilities, how does this law apply to me?
If more than 50% of your workweek is spent at a covered health care facility, you are entitled to the health care minimum wage for all hours worked at that facility during that workweek. If it’s 50% or less, the health care minimum wage applies only if the covered facility is your employer or joint employer.
Details of the Minimum Wage Increase
- When did the minimum wage increase for health care workers take effect?
The minimum wage increase was effective from October 16, 2024. This followed the DHCS notification to the Legislature on October 1, 2024, regarding data retrieval for hospital quality assurance fees, triggering the 15-day implementation period as per Labor Code section 1182.16.
The following table outlines the minimum wage increases based on the type of health care facility:
| Health Care Worker Minimum Wage Increases by Type of Health Care Facility |
|---|
| Type of Health Care Facility |
| Hospital or integrated health system with 10,000 or more full-time employees (including skilled nursing facilities operated by these employers) |
| Dialysis Clinics |
| Safety Net Hospitals |
| Intermittent clinics, community clinics, rural health clinics, or urgent care clinics associated with community or rural health clinics |
| All other covered health care facilities not listed in the other categories and not run by Counties |
| Covered Health Care Facilities run by Large Counties (more than five million people as of 1/1/23) |
| Covered Health Care Facilities run by Medium Sized Counties (250,000 to five million people as of 1/1/23) |
| Covered Health Care Facilities run by Small Counties (less than 250,000 people as of 1/1/23) |
| Skilled Nursing facilities not owned, operated, or controlled by a hospital, integrated health care delivery system, or health care system: **Only takes effect if a patient care minimum spending requirement is passed |
- How can I determine if my employer has 10,000 or more full-time employees?
The Department of Health Care Access and Information (HCAI) has published a list of health care delivery systems or health care systems with 10,000 or more employees on their website for public reference.
- What defines a safety net hospital?
A safety net hospital is characterized by a high percentage of patients covered by governmental payers like Medicare and Medi-Cal. This includes hospitals with over 90% governmental payer mix, independent hospitals with over 75%, and rural independent covered health care facilities. HCAI also provides a list of these safety net hospitals online.
- How do I identify if my employer is a community clinic, rural health clinic, or associated urgent care clinic?
Community clinics are nonprofit organizations funded by donations or government sources, providing care on a sliding scale based on patient ability to pay. This also includes intermittent clinics operating limited hours under a primary care community clinic. Detailed information on rural health clinics is available from the federal Centers for Medicare and Medicaid Services (CMS).
- As a salaried manager in a covered facility, am I affected by this law?
Yes. To be classified as exempt from wage and hour laws, salaried employees must earn at least 1.5 times the new health care worker minimum wage or twice the state minimum wage, whichever is higher, and meet specific duty requirements. For instance, if a worker is entitled to $23.00 per hour, their salary must be at least $71,760 annually to be exempt.
- Can employers increase meal or lodging credits to offset the minimum wage increase?
No. The law does not permit additional credits beyond those allowed under the statewide minimum wage.
- What should I do if I believe I am covered but my employer disagrees?
Employees can pursue a legal claim to recover unpaid wages, potentially including damages and penalties. The burden of proof rests with the employer to demonstrate ineligibility. Options for claims include filing with the Labor Commissioner, initiating a lawsuit, or using alternative dispute resolution if applicable. The Labor Commissioner’s website offers resources on wage claims and employee rights.
- If my wages are being garnished, is the health care minimum wage considered for exemptions?
Yes. For health care workers covered by the new law, wage garnishment calculations must use the applicable health care worker minimum hourly wage to determine exempt amounts, unless a higher local minimum wage applies.
Special Provisions for Public Health Care Facilities
- Are all public health care facilities included?
No. Facilities directly owned and operated by the State of California are excluded. However, the University of California system and other political subdivisions like counties and municipalities are covered.
- If I work for a city or county and spend part of my time in covered facilities, how am I paid?
If more than 50% of your workweek is spent at a covered health care facility under a public employer, you are entitled to the health care minimum wage for the entire workweek, not just the hours worked at the covered facility.
- Is there a different effective date for county-run health care facilities?
Yes. For covered health care facilities operated by counties, the minimum wage increase takes effect no earlier than January 1, 2025. The specific minimum wage rate depends on the county size.
Clinic Waiver Program
- Where can I find information about the SB 525 waiver program for clinics?
Details about the waiver program, which may allow certain clinics to delay the minimum wage increase, can be found in the Frequently Asked Questions and waiver application documents available on the relevant state department website. You can also subscribe to updates for the clinic waiver program.
Employer Responsibilities: Notices
- Do employers need to post updated minimum wage information?
Yes. Employers covered by the health care worker minimum wage law are required to post a supplement to the minimum wage order reflecting the new wage standards. The Labor Commissioner’s Office provides a Health Care Minimum Wage Supplement for this purpose.
- Are employers required to notify employees about these changes?
Yes. Employers must notify all covered employees of the applicable minimum wage schedule when the law takes effect, in a language commonly used for workplace communications. This notice was required by October 16, 2024. Clinics granted waivers also have specific notification requirements.
Interaction with Local Wage Laws
- Can local governments set a higher minimum wage specifically for health care workers?
No, cities or counties cannot enact ordinances that set a higher minimum wage exclusively for health care workers covered by this state law. However, they can maintain or establish a general minimum wage that is higher, which would then apply to health care workers as well.
Coverage for Mental Health Services
- Are organizations providing mental health services covered by this law?
Yes, coverage extends to workers in various mental health service settings that qualify as covered health care facilities. This includes psychology clinics, mental health rehabilitation centers, psychiatric hospitals, psychiatric health facilities, and county mental health facilities. Workers in covered clinics, including community and intermittent clinics offering mental health services, are also included, as are contractors and subcontractors providing mental health services within covered facilities like hospitals. The key factor is whether the employee works for a covered health care facility, regardless of the specific type of health service provided, including mental health.
This information is based on the latest updates as of December 2024 and is intended to provide a comprehensive overview of the new health care worker minimum wage law in California.
