Trick or Treat? Health Care Minimum Wage Increases in Effect this Month!

Trick or Treat? Health Care Minimum Wage Increases in Effect this Month!

Trick or Treat! A treat for employees who will get an increase, but a spooky surprise for healthcare employers who thought they would end their year as projected. Senate Bill 525, enacted a year ago, is finally taking effect this month. On October 16, 2024, employees in the healthcare industry will have an increase in their minimum wage. All future increases will occur on July 1.

As a refresher from a previous blog article, read ahead for key details and specific criteria!

Which Employers and Employees are Covered?

This new law applies to virtually every medical employer, except hospitals under the State Department of State Hospitals, tribal clinics exempt from licensure, and outpatient settings operated by tribal organizations. Some examples include facilities or work sites part of an integrated healthcare facility system, licensed general acute care hospitals, special hospitals, clinics, physician groups, and many more! (Note that most dental offices would not be included, unless they fall under one of the covered groups, such as an integrated health care system.)

Moreover, not just nurses and doctors would be entitled to the minimum wage increases. A variety of employees working for covered employers would qualify, including technicians, janitors, housekeeping staff, groundskeepers, guards, clerical workers, billers, and more. There are limited exceptions for outside salespeople, certain public sector employees, and medical transportation service workers.

Does the Law Impact Exempt Employees?

Actually, yes! To remain classified as exempt, covered healthcare employees must earn a monthly salary of 1.5 times the applicable healthcare minimum wage, or 2 times California's minimum wage, whichever is greater. This means that covered employers must continue to recalculate the minimum exempt salaries as healthcare and California's minimum wages continue to increase.

What Are the Initial Minimum Wages?

Covered healthcare employers who are county-owned, affiliated, or operated are not required to comply until 2025.

What Do We Do Next?

• Prior to October 16, 2024, update your payroll system.
• Notify your non-exempt employees within seven calendar days of the change (or earlier). Employers may do this by updating the Wage Theft Formand retaining a copy for the employee's personnel file.
• Ensure your wage statements reflect the correct pay rates, including overtime rates.
• If the change impacts your pay scales, including for job postings, be sure to update those as well.
• Consider any personnel restructuring and/or shift adjustments as needed.
• For questions regarding waivers, it is advised to consult legal counsel.

Wage-and-hour compliance on the mind? CEA members can consult with our HR advisors by calling 800.399.5331!