After months of delay, California’s healthcare minimum wage increase will finally take effect on October 16, immediately hiking wages to $21 per hour for workers at many healthcare facilities and as high as $23 per hour for workers at dialysis clinics and large healthcare systems. Additional pay increases will be gradually implemented until ultimately all covered healthcare employers in the state will be required to comply with a $25 per hour minimum that will be adjusted for inflation each year. Covered healthcare employers must act immediately to prepare for the new requirements and provide the required notices in time. Here’s what you need to know and three steps you can take now to comply.
Quick Background
Last year, Governor Newsom signed SB 525 into law, which raises the minimum wage for nearly all health care employees – hourly and salaried – and provides employees a private right of action to enforce these minimum wage requirements. SB 525 was originally set to take effect on June 1, 2024, but the effective date was pushed back due to budgetary concerns, first by one month and then again to an uncertain date (to be determined by certain triggering conditions) as early as October 15 but no later than January 1, 2025.
On October 1, state health officials notified lawmakers that one of the triggering conditions had been met and therefore the minimum wage increases would be effective October 16, and the California Division of Labor Standard Enforcement published an update to confirm.
Higher Minimum Wages Start This Month and Continue to Increase in Four Stages
Starting October 16, all covered healthcare employers must comply with SB 525. Read our comprehensive coverage on the law’s requirements, applicability, and important definitions. Below outlines the applicable minimum wage rates and effective dates by covered healthcare facility.
If you have questions about how SB 525 applies to your organization, you can visit these additional resources:
Notice Requirements
If you are a covered healthcare employer, you must act immediately to comply with two important notice requirements by October 16:
- Post Notice. You must publish this Supplement to the Minimum Wage Order in your workplace.
- Provide Notice to Employees. You also must provide notice to your employees of the minimum wage schedule that applies to them. The notice must be in the language you normally uses to communicate employment-related information to your workers.
In addition, any clinic that receives a waiver from any minimum wage increase under SB 525 must within 10 days post a copy of the waiver and provide notice to each covered worker stating that you applied for and received the waiver and listing your applicable minimum wage.
3 Steps for Covered Healthcare Employers
You must act quickly to prepare for SB 525’s impending effective date. Here are three steps you can take now:
- Consult with your employment counsel to determine if the minimum wage requirements apply to your business and which workers are covered.
- Revise applicable policies to ensure compliance with the new minimum wage requirements and review your wage and hour practices. With a higher minimum wage comes higher meal and rest period premiums, higher reporting time pay, higher split shift premiums, and higher waiting time penalties.
- Notify covered healthcare employees of the minimum wage schedule that applies to them and publish required posters or notices.
