Commencing on June 1, 2024, Senate Bill 525 will raise the minimum wage for covered health care workers at covered health care facilities in California. A “covered health care facility” as further defined by various statutes, is:  a facility or other work site that is part of an integrated health care delivery system; a licensed general acute care hospital; a licensed acute psychiatric hospital; a special hospital; a licensed skilled nursing facility, if owned, operated, or controlled by a hospital or integrated health care delivery system; a patient’s home when health care services are delivered by an entity owned or operated by a general acute care hospital or acute psychiatric hospital; a licensed home health agency; a clinic, including a specialty care clinic, a dialysis clinic, a psychology clinic, a community clinic, a rural health clinic or an urgent care clinic; a licensed residential care facility for the elderly, if affiliated with an acute care provider or owned, operated, or controlled by a general acute care hospital, acute psychiatric hospital, or the parent entity of a general acute care hospital or acute psychiatric hospital; a psychiatric health facility; a mental health rehabilitation center; an ambulatory surgical center; a physician group; a county correctional facility that provides health care services; and a county mental health facility.  Hospitals owned or controlled by the State Department of State Hospitals and tribal clinics are excluded from SB 525.

SB 525 defines a “covered health care employee” broadly to include as an employee of a health care facility that provides patient care, health care services, or services supporting the provision of health care, including janitors, technicians, laundry workers, billing personnel, food service workers, gift shop worker, and many other categories. The definition of covered health care employees excludes employment as an outside salesperson, work performed in the public sector where the primary duties performed as not health care services, delivery or waste collection from outside contractors, or medical transportation services provided by outside contractors.

SB 525 will eventually raise the minimum wage for all health care workers to $25 an hour. SB 525 establishes five separate minimum wage schedules for covered health care employers, which are tied to the type of services provided or the population served by the entity, as follows:

1. Health care organizations with 10,000 full-time employees, or that are part of an integrated health care delivery system with 10,000 or more full-time equivalent employees, or any dialysis clinic, or that are operated by a county with more than 5 million people on January 1, 2023, are on the earliest schedule, and will be required to pay a minimum wage of $23 starting in June of 2024, which will increase to $24 in June of 2025, and go up to $26 in June of 2026.
2. Health care organizations with high populations of Medicare and Medicaid patients, rural healthcare facilities, and facilities operated by a county with a population of less than 250,000 as of January 1, 2023, will have a minimum wage of $18 per hour from June 1, 2024, which will reach $25 per hour on June 1, 2033.
3. Certain types of statutorily defined clinics, community clinics, rural health clinics, and urgent care clinics will have a minimum wage starting on June 1, 2024, of $21 per hour, which will be raised to $22 per hour on June 1, 2026, and to $25 per hour on June 1, 2027.
4. For all other covered health care facility employers, the minimum wage will be $21 per hour starting on June 1, 2024, $23 per hour as of June 1, 2026, and $25 per hour beginning on June 1, 2028.
5. Covered health care facilities that are county owned or operated are not required to comply with SB 525 until January 1, 2025, at which time the appropriate schedule described above will be implemented.

SB 525 continues a trend of the state passing industry-specific legislation to regulate wages and working conditions for particular sectors. California recently passed legislation to increase the minimum wage for fast food workers to $20 an hour in April 2024. Additionally, cities have targeted the hotel industry to regulate working conditions and the minimum wage.

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