California Health Care Worker Minimum Wage Delayed Again

The minimum wage for health care workers in California has been delayed from July 1, 2024 to at least October 15, 2024. Originally, the minimum wage was supposed to take effect June 1, 2024, but it has now been delayed twice.

The Details

As a result of the recent enactment of Senate Bill 159, the increase to the minimum wage for covered health care workers will be delayed until either of the following occur:

· The California Department of Finance notifies the legislature that agency cash receipts for next quarter are at least three percent higher than projected at the time the 2024 budget was enacted. If this notification occurs, the health care minimum wage would take effect October 15, 2024.

· The California Department of Health Care Services notifies the legislature that it has initiated the data retrieval necessary to implement an increase to the hospital quality assurance fee. If this this notification occurs, the health care minimum wage would take effect the earlier of January 1, 2025, or 15 days after the notification.

Covered Health Care Facilities

Once effective, the new minimum wage for health care workers applies to nearly all health care facilities operating in the state, including:

· A facility or other work site that is part of an 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;

· An urgent care clinic, physician group, or a county mental health facility;

· A mental health rehabilitation center (see section 5675 of the Welfare and Institutions Code).

· A rural health clinic (see paragraph (1) of subdivision (l) of Section 1396d of Title 42 of the United States Code).

· An ambulatory surgical center that is certified to participate in the Medicare Program under Title XVIII (42 U.S.C. Sec. 1395 et seq.) of the federal Social Security Act.

· A county correctional facility that provides health care services; or · The following under the Health and Safety Code:

o A licensed general acute care hospital (see subdivision (a)) and a licensed acute psychiatric hospital (see subdivision (b)). These include a distinct part of any such hospital.

o A special hospital (see subdivision (f))

o A licensed skilled nursing facility, as defined in subdivision (c) of Section 1250, if owned, operated, or controlled by a hospital or integrated health care delivery system or health care system.

o A licensed residential care facility for the elderly (see Section 1569.2), 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.

o A licensed home health agency (see subdivision (a) of Section 1727).

o A clinic (see subdivision (b) of Section 1204), including a specialty care clinic, or a dialysis clinic.

o A psychology clinic (see Section 1204.1)

o A clinic (see subdivision (d), (g), or (l) of Section 1206)

o A psychiatric health facility (see Section 1250.2).

o A community clinic licensed under subdivision (a) of Section 1204 , an intermittent clinic exempt from licensure under subdivision (h) of Section 1206, or a clinic operated by any political subdivisions of the state, including the University of California or a city or county that is exempt from licensure under subdivision (b) of Section 1206.

Exceptions

The new minimum wage for health care workers doesn't cover: 1) Facilities owned, controlled or operated by the state, 2) Tribal clinics exempt from licensure, and 3) Outpatient settings operated by federal recognized tribes or tribal organizations.

Covered Health Care Employees

Covered health care employees are employees of a covered health care facility employer who provide patient care, health care services, or services that support the provision of health care. These workers include but are not limited to the following (regardless of formal job title):

Under Senate Bill 159, a contracted or subcontracted employee is also covered if both of the following apply:

1. The employee’s employer contracts with the health care facility employer (or with a contractor or subcontractor to the health care facility employer) to provide health care services, or services supporting the provision of health care.

2. The covered health care facility employer directly or indirectly, or through an agent or any other person, engages, suffers, or permits an employee to work, or exercises control over the employee’s wages, hours or working conditions; or The employee performs contracted or subcontracted work on the premises of a covered health care facility for more than one-half of the employee’s work time during a workweek.

If both apply, the contracted or subcontracted employee must be paid the applicable minimum wage for all hours worked providing patient care, health care services, or services supporting the provision of health care.

The new minimum wage for health care workers won’t apply to:

· Employment as an outside salesperson;

· Work performed by a public employee where the public employee is not primarily (more than one-half of the employee’s work time during a workweek) engaged in services performed for a covered health care facility;

· Delivery or waste collection work on the premises of a covered health care facility*

· Medical transportation services in or out of a covered health care facility* *Provided that the worker isn’t an employee of an individual that owns, controls or operates a covered health care facility.

New Minimum Wage for Health Care Workers

Once effective, the minimum wage for covered health care workers depends on the type of health care facility in question. The law also includes a schedule for these minimum wages to increase in the future.

Minimum Salary Requirement for State Exemption from Overtime

To qualify as exempt from the minimum wage and overtime under state law, the minimum salary for a covered health care employee paid on a salary basis is the greater of 150% of the applicable health care worker minimum wage or 200% of the state standard minimum wage, for fulltime employment.

Here’s how this would play out if the health care minimum wage were to go into effect on October 15, 2024.

Note: Employees must also satisfy applicable duties tests. Additionally, local minimum wages aren’t considered for the purposes of minimum salary for the state overtime exemption test, even if they are higher than the state's standard minimum wage.

Wage Orders and Employer Notice

Senate Bill 159 requires the Department of Industrial Relations to revise the Industrial Welfare Commission’s wage orders to be consistent with the new health care minimum wage.

All covered employers must:

· Post a copy of the revised order and keep it posted in a conspicuous location frequented by employees during the hours of the workday.

· Provide to each employee on the effective date of the earliest minimum wage increase a written notice, in the language the employer normally uses to communicate employment-related information to the employee, indicating the minimum wage provision that applies to the employer and the health care worker minimum wage schedule applicable to the employee.

Next Steps

Health care facility employers in California should: · Review the law with legal counsel to determine what category their organization falls under.

· Watch for developments to determine the exact effective date of the new minimum wage for health care workers.

· Post an updated wage order and provide employees with the required written notice.

· Pay employees as required.