October 11, 2024
By: Jennifer M. Misetich and T. Mark Tubis
On October 16, 2024, Senate Bill 525 will go into effect and requires every applicable “covered health care facility” to meet certain minimum wage requirements for most of their workforces. The new law applies to a broad range of health care facilities (described below) including certain physician groups, ambulatory surgery centers, clinics, skilled nursing facilities, home health agencies, various hospitals, and several others. The wages required under this new law are higher than certain other recent California minimum wage laws and apply to each “covered health care employee.”
Covered health care employees include employees who provide patient care, health care services, and services supporting the provision of health care. More specifically, “health care services” means patient care-related services including nursing; caregiving; services provided by medical residents, interns, or fellows; 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; but only where such services support patient care.
Applicable employees include, but are not limited to, any nurse, physician, caregiver, medical resident, intern or fellow, patient care technician, janitor, housekeeping staff person, groundskeeper, guard, clerical worker, nonmanagerial administrative worker, food service worker, gift shop worker, technical and ancillary services worker, medical coding and medical billing personnel, scheduler, call center and warehouse worker, and laundry worker, regardless of formal job title.
Covered health care employees also include contracted or subcontracted employees if certain elements are met.
Covered health care employees do not include: (i) employment as an outside salesperson; (ii) any work performed in the public sector where the primary duties performed are not health care services; (iii) delivery or waste collection work on the premises of a covered health care facility, provided that the delivery or waste collection worker is not an employee of any person that owns, controls, or operates a covered health care facility; or (iv) medical transportation services in or out of a covered health care facility, provided that the medical transportation services worker is not an employee of any person that owns, controls, or operates a covered health care facility.
The new law details every type of workplace that is considered a “covered health care facility.”
What this means for you:
If you are a covered health care facility, then you likely owe wages to covered health care employees. The below table describes each type of covered health care facility and the applicable minimum wages:
| 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 |
10/16/24 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 |
10/16/24 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 |
$18 |
10/16/24 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 |
10/16/24 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 |
| Physician groups with 25 or more physicians, ambulatory surgical centers certified to participate in Medicare, psychology clinics, psychiatric health facilities, and mental health rehabilitation centers |
$21 |
10/16/24 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:
Once spending requirement passed 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 |
Buchalter attorneys partner closely with clients to provide broad, protective counsel that minimizes risk exposure. Our critical risk-management solutions allow clients to focus on managing their businesses while we manage the details of their healthcare regulatory, corporate, and employment issues. We work closely with business management to ensure workplace and industry compliance, and to respond immediately when conflict arises. We prepare and implement employee handbooks and both patient and provider documents, advise on personnel matters, wage issues, union relations, corporate structures, healthcare privacy and fraud and abuse, negotiate employment and severance agreements, draft contractor agreements, and defend lawsuits. Our clients vary from closely-held companies to major financial institutions, health care businesses, restaurant chains, municipalities, manufacturers, and retailers, with offices and locations nationwide.
As always, our team stands ready to assist your business with all of its employment, health care, corporate, or any other legal needs. If you have questions or need assistance, please feel free to contact the attorneys listed below.
Jennifer Misetich
T. Mark Tubis
This communication is not intended to create or constitute, nor does it create or constitute, an attorney-client or any other legal relationship. No statement in this communication constitutes legal advice nor should any communication herein be construed, relied upon, or interpreted as legal advice. This communication is for general information purposes only regarding recent legal developments of interest, and is not a substitute for legal counsel on any subject matter. No reader should act or refrain from acting on the basis of any information included herein without seeking appropriate legal advice on the particular facts and circumstances affecting that reader. For more information, visit www.buchalter.com.
