On June 29, 2024, Governor Newsom signed AB 159 which was included in the state’s budget and indicates the increased health care minimum wage contingent on the state bringing in at least three percent more revenue from July 1, 2024, through September 30, 2024. The original implementation date of June 1, 2024, is delayed to October 15, 2024, or potentially January 1, 2025, depending on state revenue.
The new minimum wage rates vary based on the type of healthcare facility:
- Large hospitals: $23/hour by October 15, 2024, increasing to $25/hour by 2026.
- Smaller hospitals and rural facilities: $18/hour by October 15, 2024, increasing to $25/hour by 2033.
- Clinics: $21/hour by October 15, 2024, increasing to $25/hour by 2027.
- Other healthcare facilities: $21/hour by October 15, 2024, increasing to $25/hour by 2028.
After reaching $25/hour, wages will continue to increase annually based on inflation or 3.5 percent, whichever is lower.
Healthcare employers should carefully review the new regulations and determine how they will be affected as they may need to update payroll systems, communicate with employees, and adjust budgets.
