1. Labor Commissioner's Office

Health Care Worker Minimum Wage Frequently Asked Questions

The FAQs provide general information and are not exhaustive. They do not constitute legal advice regarding your particular circumstances.

1. What is the new law that raises the minimum wage for workers of certain health care employers?

Recently enacted Legislation, SB 525 (Chapter 890, Statutes of 2023), SB 828 (Chapter 12, Statutes of 2024), and SB 159 (Chapter 40, Statutes of 2024), added sections 1182.14, 1182.15, and 1182.16 to the Labor Code, increasing the minimum wage for workers of certain health care employers.

To receive the higher minimum wage, workers must, (1) work for certain “health care facilities” that are covered in the new law and (2) provide health care services or support the provision of health care.  The effective dates for the increases depend upon certain events taking place later this year.  See Question 12, below.

Who Is Covered by the New Health Care Minimum Wage?

2. Which workers are covered by the new law?

Workers of covered health care facilities as described under questions 3-8 are covered by the health care minimum wage law if they provide health care services (including patient care) or provide services supporting the provision of health care. See questions 9-11.

3. Which health care facilities must pay the higher minimum wage under the new law?
• Hospitals and Hospital Systems
• A facility or other work site that is part of an integrated health care delivery system
• A licensed general acute care hospital. These hospitals provide 24-hour in-patient care and basic hospital services, including medical, nursing, surgical, anesthesia, laboratory, radiology, pharmacy, and dietary services. Workers who work for general acute care hospitals and provide services in a patient’s home are covered as well.
• A licensed acute psychiatric hospital. Acute psychiatric hospitals provide 24-hour in-patient care for people with mental health conditions and basic services including medical, nursing, rehabilitative, pharmacy, and dietary services. Workers who work for acute psychiatric hospitals and provide services in a patient’s home are covered as well.
• A psychiatric health facility. These facilities provide 24-hour in-patient care for people with mental health conditions and basic services including psychiatry, clinical psychology, psychiatric nursing, social work, rehabilitation, drug administration, and appropriate food services for those persons whose physical health needs can be met in an affiliated hospital or in outpatient settings. A list of all Licensed Psychiatric Health Facilities is available here.
• Care in Residential Settings
• A licensed skilled nursing facility owned, operated or controlled by a hospital or integrated health care delivery system.
• A residential care facility for the elderly if it is affiliated with an acute care provider or owned, operated or controlled by a general acute care hospital or acute psychiatric hospital or the parent entity of a general acute care hospital or acute psychiatric hospital. A residential care facility for the elderly is housing for people sixty years or older with varying levels of care and supervision.
• A licensed home health care agency. These agencies generally send workers to patient’s homes to provide care.
• A physician’s group. A physician’s group is a medical practice or medical partnership that has 25 or more physicians.
• A county mental health facility.
• A county correctional facility (e.g. jail) that provides health care services.
• Mental Health Rehabilitation Centers. A list of all Licensed Mental Health Rehabilitation Centers is available here.
• Outpatient clinics. The following outpatient facilities that provides health care services to patients that remain less than 24 hours are covered:
• Clinics that perform particular types of services:
• A dialysis clinic.
• A psychology clinic.
• A surgical clinic or ambulatory surgical center certified to participate in Medicare.
• An urgent care clinic.
• A rehabilitation clinic providing at least two of the following: physical therapy, occupational therapy, and social, speech pathology or audiology services.
• An alternative birth center that provides prenatal care and delivery services
• Clinics operated by certain entities
• A clinic operated by a city, county, other political subdivision of the State or the University of California.
• Hospital clinics. These are clinics owned, operated, or maintained as outpatient departments of hospitals.
• A teaching clinic. These are clinics operated by or affiliated with an institution of learning that teaches a healing art and has been approved by the applicable state board or commission.
• Clinics Providing Primary Care
• A nonprofit clinic providing health care, medical research, and health education. The clinic must have 40 or more physicians and surgeons operating as independent contractors and representing not less than 10 board-certified specialties, of which two-thirds practice full-time at the clinic.
• A rural health clinic that is not license-exempt. Please refer to the federal Centers for Medicare and Medicaid Services (CMS) for more information about rural health clinics.
• A community clinic or intermittent clinic. A community clinic is run by a nonprofit corporation that receives donations or government funds to operate where a patient may be charged only based on their ability to pay. An intermittent clinic is a clinic open for limited services no more than 40 hours a week and that is operated by a primary care community or free clinic at a separate place than the main clinic.¹

California Department of Public Health’s Cal Health Find Database available here can also assist in identifying health care facility types.

On that webpage, search by the “facility name” or location to find the facility. The search results will identify the facility type.

4. What if I am a health care worker that does not work at one of these named facilities; do I get the health care minimum wage?

No. Only the health care workers at covered health care facilities are entitled to the increased minimum wage.

Some health care workers are not covered by the law if they work, for example, at a physician group with less than 25 physicians that is not covered by the new law.

Additionally, any health care worker at a health care facility owned, controlled, or operated by the State of California is not entitled to the health care minimum wage.  However, health care workers for a political subdivision of the state, like a county, municipality, health care district or the University of California system are covered by the law.

5. Are workers at skilled nursing facilities not owned, operated, or controlled by hospitals entitled to the health care workers minimum wage?

Not at this time. The increased minimum wage for health care workers at skilled nursing facilities not owned, operated, or controlled by hospitals will go into effect only when there is a patient care minimum spending requirement applicable to skilled nursing facilities. A minimum spending requirement refers to a percentage of specified revenues that must be expended on direct patient-related services in a fiscal year by a health facility. Under existing law, there is no minimum spending requirement that must be met for skilled nursing facilities. Enactment of a minimum spending requirement requires separate legislative action.

6. Are employees of congregate living health facilities subject to the health care minimum wage law?

Congregate living health facilities are not covered by the health care minimum wage law.

Congregate living health facilities provide care that is generally less intensive than that in hospitals but more intensive than skilled nursing facilities. These residential homes have a capacity of 18 or fewer beds (unless operated by a government entity) and have a home-like environment. They provide 24-hour in-patient and supportive care, medical supervision, dietary, social, and recreational services. They also provide one of the following: services for people who are mentally alert, persons with disabilities who may be on a ventilator; services for people with a terminal or life-threatening illness, or people who are “catastrophically and severely disabled” as stated in the law.

7. Are employees of independent practice associations subject to the health care minimum wage law?

Employees of independent practice associations are not covered by the health care minimum wage law unless the practice fits within a covered facility category.  See question 3 above.

8. Are employees of outpatient private practice physical therapy clinics subject to the health care minimum wage law?

 
Employees of outpatient private practice physical therapy clinics that provide only physical therapy and are not owned, operated, or controlled by a covered health care facility are not covered by the health care minimum wage law unless the practice fits within a covered facility category. See question 3 above. 

9. What does it mean for a worker to provide “health care services” or “services supporting the provision of health care”?

“Health care services” or “services supporting the provision of health care” mean patient care-related services including nursing; caregiving; services provided by medical residents, interns, or fellows; and services supporting patient care including technical and ancillary services; janitorial work, housekeeping; groundskeeping; guard duties; business office clerical work; food services; laundry; medical coding and billing; call center and warehouse work; scheduling; and gift shop work.

As noted in question 1, a worker is only covered by the health care minimum wage law if the worker performs any of these services and works at a covered health care facility (see list in question 3).

10. Are employees of contractors or subcontractors of covered health care facilities covered by the new law?

 Employees of subcontractors or contractors are covered by the new health care minimum wage if:

• The worker provides health care services or services supporting the provisions of healthcare, AND
• The worker’s employer (the contractor or subcontractor) contracts with a “covered health care facility” directly or through a contractor or subcontractor to provide health care services or services supporting the provision of health care, AND
• The health care facility operates as a joint employer of the worker (engages, suffers, or permits the employee to work or exercises control of the employees’ wages hours, or working conditions) OR the worker spends more than 50% of their time in a workweek performing work at the covered health care facility.
11. Am I entitled to the health care minimum wage if I am a janitor that is assigned to work for a private covered health care facility for part of my time and to non-health care office buildings for the other part of my time?

If you work more than 50% of a workweek at a covered health care facility, you must be paid at least the health care minimum wage for all hours that you worked at the facility.

If you worked 50% or less of a workweek at a covered health care facility, you must be paid at least the health care minimum wage for all hours you worked at the covered health care facility only if the covered health care facility was your employer or joint employer.

See question 21 if you are public employee that works only part time at a covered health care facility.

Minimum Wage Increase

12. When does the minimum wage increase for health care workers take effect?

The minimum wage increases will become effective on a date between October 15, 2024 and January 1, 2025. The precise effective date depends on several factors:


• The effective date will be October 15, 2024 if state agency cash receipts for July through September 2024 are at least 3 percent higher than projected in the 2024 Budget, or
• The effective date will be the sooner of January 1, 2025 or 15 days after the California Department of Health Care Services notifies the Legislature that it has initiated the data retrieval related to hospital quality assurance fees for the program period commencing January 1, 2025. The earliest that this data retrieval can begin is October 1, and the data is generally retrieved in October each year.

Here are some examples of how the triggers listed above to implement the minimum wage increases could work:

• If on October 10, 2024, the Director of Finance informs the Joint Legislative Budget Committee that the agency cash receipts as defined in SB 159 for July 1, 2024 to September 30, 2024 are at least 3 percent higher than projected in the 2024 Budget, the law will go into effect on October 15, 2024.
• If the State Department of Health Care Services notifies the Legislature on October 1, 2024 that it has started retrieving the data in the trigger, the law will go into effect on October 16, 2024, which is 15 days after the State Department of Health Care Services’ notification.

Given these timelines, employers are encouraged to be prepared to implement the new wages as early as October 15.

The table below sets out the types of covered health care facilities that are subject to the health care minimum wage, what the wage schedule is, and when it becomes effective.

Health Care Worker Minimum Wage Increases by Type of Health Care Facility
Type of Health Care Facility	Minimum Wage when the law takes effect	Full Minimum Wage Schedule
Hospital or integrated health system with 10,000 or more full-time employees (including skilled nursing facilities operated by these employers)	$23	Effective Date* to 6/30/25: $23 7/1/25 to 6/30/26: $24 7/1/26 to 12/31/27: $25 1/1/28: adjusted for inflation each year
Dialysis Clinics	$23	Effective Date* to 6/30/25: $23 7/1/25 to 6/30/26: $24 7/1/26 to 12/31/27: $25 1/1/28: adjusted for inflation each year
Safety Net Hospitals (see FAQ 14)	$18	Effective Date* to 6/30/25: $18 6/1/25 to 6/30/33: increases 3.5% each year 7/1/33 to 12/31/34: $25 1/1/35: adjusted for inflation each year
Intermittent clinics, community clinics, rural health clinics, or urgent care clinics associated with community or rural health clinics	$21	Effective Date* to 6/30/26: $21 7/1/26 to 6/30/27: $22 7/1/27 to 12/31/28: $25 1/1/29: adjusted for inflation each year
All other covered health care facilities not listed in the other categories and not run by Counties	$21	Effective Date* to 6/30/26: $21 7/1/26 to 6/30/28: $23 7/1/28 to 12/31/29: $25 1/1/30: adjusted for inflation each year
Covered Health Care Facilities run by Large Counties (more than five million people as of 1/1/23)	$23 (no earlier than 1/1/25)	1/1/25 to 6/30/25: $23 7/1/25 to 6/30/26: $24 7/1/26 to 12/31/27: $25 1/1/28: adjusted for inflation each year
Covered Health Care Facilities run by Medium Sized Counties (250,000 to five million people as of 1/1/23)	$21 (no earlier than 1/1/25)	1/1/25 to 6/30/26: $21 7/1/26 to 6/30/28: $23 7/1/28 to 12/31/29: $25 1/1/30: adjusted for inflation each year
Covered Health Care Facilities run by Small Counties (less than 250,000 people as of 1/1/23)	$18 (no earlier than 1/1/25)	1/1/25 to 6/30/25: $18 6/1/25 to 6/30/33: increases 3.5% each year 7/1/33 to 12/31/34: $25 1/1/35: adjusted for inflation each year
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	No effective date	Schedule if a patient care minimum spending requirement is passed: Effective Date to 6/30/26: $21 7/1/26 to 6/30/28: $23 7/1/28 to 12/31/29: $25 1/1/30: adjusted for inflation each year

 

* As noted above, the initial effective date depends on several factors. This chart will be updated when the precise effective date is known.

13. How do I know if my employer has 10,000 or more full-time employees?

The Department of Health Care Access and Information posted a list of all health care delivery systems or health care systems with 10,000 or more employees on their website.

14. How do I know if my employer is a safety net hospital?

A safety net hospital is a hospital with a high governmental payor mix, an independent hospital with an elevated governmental payor mix, or a rural independent covered health care facility. A high-governmental payor mix means that over 90% of patients (as measured by adjusted patient days) are paid for by Medicare or Medi-Cal. An elevated payor mix means that over 75% of patients (as measured by adjusted patient days) are paid for by Medicare or Medi-Cal.

The Department of Health Care Access and Information posted a list of these safety net hospitals on their website.

15. How do I know if my employer is a community clinic, a rural health clinic, or an urgent care clinic owned by or affiliated with a community or a rural health clinic?

A community clinic is run by a nonprofit corporation that receives donations or government funds to operate where a patient may be charged only based on their ability to pay. Community clinics also include an intermittent clinic, which is a clinic open for limited services no more than 40 hours a week and that is operated by a primary care community clinic or free clinic at a place separate from the main clinic.

Please refer to the federal Centers for Medicare and Medicaid Services (CMS) for more information about rural health clinics.

16. I am a manager at a covered health care facility paid a salary and do not receive overtime. Does this law impact me?

Under this new law, to qualify as an “exempt employee” for wage and hour purposes, you must receive a salary of at least 1.5 times the new health care worker minimum wage or two times the state minimum wage, whichever is greater, and meet other specific duty requirements. 

For example, if you are a worker entitled to $23.00 per hour under the new health care minimum wage law and if your salary is less than $71,760², you do not meet the salary threshold test and cannot be considered an exempt employee for wage and hour purposes and should be paid the overtime rate for overtime hours worked.

17. Can an employer increase the amount of meal or lodging credits that count toward the minimum wage under the Industrial Welfare Commission Orders?

No.  The law increasing the minimum wage for health care workers did not authorize additional credits to the minimum wage.  A health care facility covered by the law may only credit the amounts allowed by the state-wide minimum wage.

18. I believe I am covered by the new law, but my employer says I am not. What should I do?

An employee who has not been paid the health care minimum wage can bring a legal claim to recover wages due and possibly related damages and penalties. Your employer will carry the burden of showing you are not entitled to the health care minimum wage.

Generally, there are three ways to present such a claim: 1) through the Labor Commissioner; 2) through a lawsuit in court; or 3) through an alternative dispute resolution system such as arbitration (if required or allowed under an employment agreement). Employees pursuing the first option can file an individual wage claim with the Labor Commissioner's Wage Claim Adjudication Unit, or they can file a Report of Labor Law Violation with the Labor Commissioner's Bureau of Field Enforcement, which does not pursue individual claims, but may investigate and cite the employer. More information about wage claims and employee rights in general is available on the Labor Commissioner’s website or from any of the Labor Commissioner's local offices.

19. I am a health care worker covered by the new law, and a collector is attempting to garnish my wages-that is, get the money from my paycheck before I receive it. I understand that part of the hourly minimum wage that I make is protected from collection. Is the minimum wage for purposes of garnishment the health care minimum wage?

Yes. When calculating the wages exempt from garnishment for a health care worker covered by the new law, the party seeking to garnish the wages must use the applicable health care worker minimum hourly wage unless a higher, local minimum hourly wage exists.

Special Rules for Public Covered Health Care Facilities

20. Are all public health care facilities covered by the new law?

No.  Any health care worker at a health care facility owned, controlled, or operated by the State of California is not entitled to the health care worker minimum wage. However, workers for the University of California system are covered by the law.

21. Am I entitled to the health care minimum wage if I am a janitor that works directly for a city or county employer and spend 60% of my time in a workweek cleaning hospitals at a covered health care facility but I perform the other 40% of my work in a workweek for non-health care office buildings?

Yes. Because you work 60% of your time in a workweek cleaning hospitals at a covered health care facility, you are entitled to the higher health care minimum wage for 100% of your work that workweek, not just the 60% of your time working directly for a covered health care facility.  This is because you are primarily working (more than 50% of your work hours) as a covered health care employee for a public employer.

Note that the law applies differently if you work for a private employer (see question 11), because public employees receive the health care minimum wage for all hours worked in a workweek when they spend more than 50% of their hours that workweek performing work for a covered health care facility rather than just the portion time worked in a workweek performing health care services or services supporting the provision of health care for a covered health care facility.

22. I work for a county health care facility. Is there a difference in when the law takes effect for me?

Yes.  The health care minimum wage for covered health care facilities run by counties takes effect January 1, 2025 at the earliest. The applicable health care minimum wage will depend on the size of the county as described in question 12.

Clinic Waiver program

23. Where can I find information about the SB 525 waiver program that allows certain clinics to apply for a waiver that would delay the increase of the health care minimum wage?

Information on the waiver program is available in Frequently Asked Questions (the application is available here). To receive updates on the clinic waiver program, you can sign up for an alert here by checking the box “Healthcare Minimum Wage and Waiver Program Updates,” and then clicking “Subscribe.”

Notice to Employees

24. Does an employer covered by the new law have to post a new minimum wage or Industrial Welfare Commission Order?

Yes. A supplement to the minimum wage order must be posted by employers covered by the health care worker minimum wage on the effective date of the earlier minimum wage increase.

The Labor Commissioner’s Office will provide the Health Care Minimum Wage Supplement to the minimum wage order, an updated Wage Order 4, and an updated Wage Order 5 once the effective date of the law is clear based on a triggering event described in Question 12.

25. Does an employer covered by the new law have to provide notice to their employees?

Yes. Every employer covered by the health care worker minimum wage must provide notice to their employees of the minimum wage schedule that applies to them when the law first takes effect. The notice must be in the language the employer normally uses to communicate employment-related information to the workers. Please see Question 12 regarding when the law will take effect.

Additionally, any clinic that receives a waiver from any minimum wage increase under the law must within 10 days post a copy of the waiver and provide each covered health care worker a notice that states that the employer applied for and received the waiver and lists the applicable minimum wage for the employer.

Interaction with Local Minimum Wage Laws

26. Can a city or county pass a health care worker minimum wage law that sets a higher wage for only covered health care workers?

No, a city or county cannot pass an ordinance setting a higher minimum wage only for health care workers covered by this law.

However, a city or county can set a higher general minimum wage for all employees that would apply to employees covered by this law. For example, a local government minimum wage law could require all employees in the city be paid more than the current health care worker minimum wage.  The covered health care facility then must pay the higher, local minimum wage.

A local government can also set a higher minimum wage that is specific to a particular group of employees so long as it does not include covered health care facility employees. Visit Minimum Wage Frequently Asked Questions (ca.gov)

¹“Special hospitals” are also covered but there are none currently operating in California.

²The two mathematical equations are as follows:
$16.00 (per hour) *2 * 40 (hours) *52 (weeks) = $66,560 per year, as compared to:
$23.00 (per hour) * 1.5 * 40 (hours) * 52 (weeks) = $71,760 per year.
The latter formula results in a higher annual salary, and becomes the salary threshold for workers entitled to $23.00 an hour.

July 2024