Health Care Minimum Wage Increase Delayed Again!

As you may remember from our previous newsletter, SB 525 was signed into law last October, aiming to gradually—but significantly—increase the minimum wage for healthcare workers to $25 per hour, starting on June 1, 2024. But the significant budget shortfall this year has caused the Legislature to agree with Governor Newsom to delay implementing the new law.

On May 31, Governor Newsom signed SB 828, which pushed the initial effective date from June 1 to July 1. Then, on June 29, Governor Newsom signed SB 159, postponing the healthcare minimum wage increase until one of the following events occurs:

1. If certain tax revenues exceed projections by at least 3% between July and September, the effective date will be October 15, 2024.
2. If the State Department of Health Care Services informs the Joint Legislative Budget Committee that it has initiated data retrieval necessary to increase hospital quality assurance fee revenues for the period beginning January 1, 2025, the minimum wage increase will take effect on January 1, 2025, or 15 days after the notification, whichever is earlier.

This means healthcare employers covered by the new law are not required to comply with the minimum wage increase by July 1. The effective date will now depend on which of the above events occurs first.