New California healthcare worker minimum wage requirements in 2024

A version of this article was published in the January 2024 edition of Healthcare News. See updated details in California to update healthcare worker minimum wage requirements.

Governor Gavin Newsom signed California senate bill 525 (California SB 525) on Oct. 13, 2023, rolling out a new minimum wage standard for healthcare workers. California SB 525 impacts most California healthcare employees and facilities, setting the new standard at $25 per hour, increasing wages up to 30% beginning June 1, 2024.

Impacted healthcare employees — and employers

California SB 525 sets a new salary threshold for exempt healthcare employees. This legislation will have broad-reaching impacts on California healthcare employers, whether or not they’re directly subject to these requirements, as salary expectations will increase for the entire market.

Covered employees

Covered employees, per California SB 525, are those providing patient care and services supporting providing healthcare, or members of a healthcare team including certified nursing assistants, technicians, patient aides, food service workers, housekeeping, medical coders and billers, schedulers, laundry workers, and more — including contract workers. The expansive definition is designed to combat the shortage of healthcare workers in the state of California.

Employees not covered

Outside salespeople, public sector employees who don’t perform healthcare services, delivery or waste collectors not covered by a healthcare facility, and medical transport service workers who aren’t employed by a covered healthcare facility are among workers who don’t qualify.

Impact on employers

Nearly all healthcare employers will be required to implement these new minimum wage standards except hospitals controlled by the California Department of State Hospitals, Tribal clinics exempt from licensure, and outpatient settings operated by Tribal organizations.

This law also limits a healthcare employer’s ability to meet the salary threshold required for most exemptions from overtime pay and minimum wage. Employers can avoid paying the new minimum wage and overtime to salaried employees earning a monthly salary that’s no less than 150% of the healthcare worker minimum wage or 200% of the applicable minimum wage, whichever is greater, for full-time employment.