1. Labor Commissioner's Office

Health Care Worker Minimum Wage Law Clinic Waiver Program

The Health Care Worker Minimum Wage Law (Labor Code sections 1182.14, 1182.15 and 1182.16) charges the Department of Industrial Relations and Department of Health Care Access and Information with administering a waiver program for certain clinics, specifically those described in Labor Code 1182.14(c)(3)(A)(i)-(iv), who meet specified criteria.

1. What is the health care minimum wage clinic waiver program?

Under Labor Code 1182.14, certain covered health care facilities (detailed further in FAQ 3 below), can apply for a waiver that would allow for a delay of the health care minimum wage requirements applicable to the facility. The application is available here.

2. Who evaluates and issues the waiver?

The Department of Industrial Relations will issue the waivers. The Department of Health Care Access and Information will determine whether the covered health care facility demonstrates that it meets the requirements to obtain a waiver.

3. Who can apply for the clinic waiver program?

   The following clinics are eligible to apply for a waiver:

   1. A clinic as defined in subdivision (h) of Section 1206 of the Health and Safety Code, that is not operated by or affiliated with a clinic described in subdivision (b) of Section 1206 of the Health and Safety Code.
   2. A community clinic licensed under subdivision (a) of Section 1204 of the Health and Safety Code, and any associated intermittent clinic exempt from licensure under subdivision (h) of Section 1206 of the Health and Safety Code.
   3. A rural health clinic, as defined in paragraph (1) of subdivision (l) of Section 1396(d) of Title 42 of the United States Code, that is not license-exempt.
   4. An urgent care clinic that is owned by or affiliated with a facility defined in (ii) or (iii).

   Absent a waiver, the above facilities are subject to the minimum wage requirements as outlined in the Labor Commissioner’s Office Frequently Asked Questions.

4. What is required to apply for a waiver?

To obtain a waiver, a covered health care facility must submit the following:

1. The covered health care facility’s and any parent or affiliated company’s:
   1. Most recent audited financial statements.
      1. If the submission date is within 120 days of the entity’s fiscal year end and the audited financial statements have not been completed, the previous year’s audited financial statement plus internally prepared financial statements (or draft audit) for the recently ended fiscal year end must be submitted, and
   2. Year-to-date internally prepared financial statements no older than 45 days prior to the date of submission, and
   3. Examined level forecasting with an attestation from an independent Certified Public Accountant demonstrating that compliance with this section would raise doubt about the covered health care facility’s and its parent company’s ability to maintain a positive cashflow over the next 12 months, and
   4. Calculations from the year-to-date internally prepared financial statements showing that the covered health care facility and its parent company have less than 45 days cash-on-hand and a current ratio of current assets to current liability of one or less.
2. A declaration signed by an authorized executive officer of the covered health care facility attesting that  all documents and information provided to the Department of Health Care Access and Information in conjunction with the waiver request and application form are true, correct, and represent the scope of business conducted by the applicant. A sample declaration page can be found here.
5. Do you have example formula calculations for days cash on hand and the current ratio?
1. Days Cash on Hand:

   Days Cash on Hand = unrestricted cash, cash equivalents, and marketable securities ÷ [(operating expenses – non-cash charges) ÷ 365 days]

2. Current Ratio:

Current Ratio = (Current Assets ÷ Current Liabilities)

6. Will the submitted application materials and financial documents be made available to the public?

If a waiver is approved, the Department of Industrial Relations will make approved information, including the intake application and waiver determination, available on its website within 15 working days of the issuance of the waiver. The Department of Health Care Access and Information will make the audited financial information submitted in conjunction with an approved waiver available on its website within 15 working days of the issuance of the waiver. All submitted application information is subject to Public Records Act requests.

7. Are there any compliance standard requirements for the financial documents being submitted?

Yes. All financial documents submitted should be ADA screen reader accessible to be eligible for review. Non-compliant documents will be sent back to the applicant for remediation prior to proceeding with review of the waiver.

8. After receiving a waiver, are there any notification or posting requirements for the employer?

   Yes. If a waiver is issued, any covered health care facility affected by the waiver shall within 10 days of notice from the Department of Industrial Relations:

   1. Post a copy of the waiver, including the applicable minimum wage, in a conspicuous location frequented by employees during the hours of the workday.
   2. Provide to each covered health care employee, a written notice, in the language the covered health care facility normally uses to communicate employment-related information to the covered health care employee, informing the covered health care employee the covered health care facility applied for and received a waiver of the increase of the minimum wage and stating the applicable minimum wage.
9. If a waiver is approved, what minimum wage applies to the facility?

If a facility’s waiver request is approved, the original schedule of minimum wage increases found in Labor Code section 1182.14(c)(3)(B) is delayed by 12 months for that facility. For a clinic eligible for the waiver program, that schedule is $21 per hour starting on July 1, 2024, $22 per hour starting July 1, 2026, and $25 per hour starting July 1, 2027. If the facility receives a waiver, the $21 per hour wage will be effective on July 1, 2025, the $22 wage will be effective starting July 1, 2027, and the $25 wage will be effective on July 1, 2028. Note that the actual effective date of the first wage will be in late 2024, pursuant to SB 159, California Labor Code section 1182.16 (see Health Care Worker Minimum Wage FAQ 12). However, a waiver covers the 12-month period beginning July 1, 2024. A clinic may extend a waiver of the first wage increase beyond July 1, 2025 by applying for a second waiver (see FAQ 10, below).

10. Can a covered health care facility apply for consecutive waivers?

Yes. A covered health care facility may apply for and be issued a waiver in consecutive years. Each successive waiver delays the schedule of wage increases by an additional 12 months. However, no waivers are available after July 1, 2032, and every covered health care facility must pay the applicable minimum wage as adjusted beginning July 1, 2033, regardless of whether the facility received any waivers.

11. How can a covered health care facility apply for a waiver?

Step 1: A covered health care facility or its parent entity should submit the initial intake application to the Department of Industrial Relations per the instructions on the application. The initial application will request entity, licensure, and contact details. A draft of the application is available here. The Department of Industrial Relations will review and refer the application to the Department of Health Care Access and Information.

Step 2: Once the applicant is determined to be an eligible covered health care facility, the applicant must submit financial documents to the Department of Health Care Access and Information. Please note that financial documents must be ADA screen reader accessible to be reviewed and considered.

Step 3: When a determination is made, the Department of Industrial Relations will notify the applicant if their waiver request was approved or denied. 
For facilities seeking a waiver of the first minimum wage increase, applications will be accepted beginning on August 12, 2024 and must be submitted no later than September 20, 2024.

July 2024