WHAT’S NEW IN 2024 HEALTH CARE FACILITY PAY HIKES Minimum Wage Increases Start June 1, 2024 « Law Offices of Timothy Bowles | Top Employment Law Firm in Los Angeles

Minimum Wage Increases Start June 1, 2024

To address the shortage of health care workers, Senate Bill 525 (SB 525) created Labor Code sections 1182.14 and 1182.15.  Effective June 1, 2024, the new laws provide substantial minimum wage increases for health care workers in facilities ranging from tiny residential care facilities for the elderly (RCFEs) to hospital systems with more than 10,000 workers.  Eventually raising all non-exempt health care workers to $25/hour, the rate of increase varies depending on type and size of health care provider.  The new laws supersede local minimum wage laws.

“Covered health care facility” includes not only employees of large acute care hospitals and facilities in integrated health care systems, licensed skilled nursing facilities,  various kinds of clinics, including dialysis, specialty clinics affiliated with schools for teaching purposes, medical research and education facilities, and urgent care clinics, but also physician groups with 25 or more physicians, licensed RCFEs, licensed home health agencies, and even county correctional institutions and patients’ homes where health care services are delivered by entities owned by acute care or psychiatric hospitals.

Employees who provide patient care, health care services and health care supporting services, are covered.   Supporting services include positions such as housekeeping, janitors, clerical and nonmanagerial administrative workers, guards, gift shop personnel, food service workers, groundskeepers, warehouse and laundry workers.

The new laws also cover contractor employees and subcontractors who perform or support health care services primarily on the premises of a health care facility.

Under section 1182.14, the pay categories and rates for covered facilities are quite detailed:

  1. The default minimum wage for health care workers, unless otherwise specified in the statute is: $21/hour from June 1, 2024 to May 31, 2026; $23/hour from June 1, 2026 to May 31, 2028; and $25/hour as of June 1, 2028.
  1. For large health care facility or integrated health care delivery systems, employers with 10,000 or more full-time equivalent employees, those in counties with 5 million or more population, and certain dialysis clinics and their owners and operators, wages increase to $23/hour on June 1, 2024; $24/hour on June 1, 2025, and $25/hour on June 1, 2026.
  1. For hospitals and independent hospitals with a high or elevated governmental payor mix, e.g., Medicare and Medicaid, rural independent health care facilities, and health care facilities owned, operated or affiliated with counties with population under 250,000, the rate is $18/hour as of June 1, 2023, with annual 3.5% increases, and $25/hour as of June 1, 2033.
  1. For health care workers at an integrated health care delivery system, certain licensed general acute care hospitals, or distinct sections of such hospitals, and special hospitals, as well as certain clinics, community clinics, rural health care clinics, and urgent care clinics, the rates are: $21/hour from June 1, 2024 to May 31, 2026; $22/hour from June 1, 2026 to May 31, 2027; and $25/hour as of June 1, 2027.

The law tasks the Department of Industrial Relations (DIR) with developing a waiver program by March 1, 2024.  Under the program, a covered health care facility can apply for an alternate phase-in or temporary pause of the new wage requirements if it can show through documentary evidence that complying with the new wages “would raise doubts about [the facility’s] ability to continue as a going concern under generally accepted accounting principles.”

Section 1182.15 requires licensed skilled nursing facilities to increase health care worker wages to $21/hour n June 1, 2024, $23/hour on June 1, 2026, and $25/hour on June 1, 2028.   However, section 1182.15 only goes into effect when a patient care minimum spending requirement applicable to skilled nursing facilities is required.

For salaried health care workers to be exempt from overtime, health care facilities must pay them a monthly salary equivalent to at least 200 percent of the state minimum wage or 150 percent of the health care worker minimum wage.


Employers in the health care industries need to ascertain whether they are covered by the new laws and plan how to comply starting June 1, 2024.  Facilities seeking a waiver should watch for the DIR’s imminent issuance of FAQs and forms.

For further information, please contact Tim BowlesCindy Bamforth or Helena Kobrin.

See also:

Helena Kobrin
February 23, 2024

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