California Creates a Second "Selective" Minimum Wage: Health Care Workers’ Minimum Wage Set to Increase to $25 an Hour -With Some Workers Receiving a Raise of $7.50 an Hour in 7 Months.

Employers should be aware that California appears to be on a mission: one where the legislature attempts to create “selective” minimum wages for certain industries. Currently, the state minimum wage is $15.50 an hour and is set to increase to $16.00 an hour in January of 2024- an increase of a mere 50 cents. Just weeks after California enacted a new law to increase the minimum wage for fast food workers to $20 an hour, California enacted a second law to increase the minimum wage for health care workers to $25 an hour. This second law gives some healthcare workers a pay raise of $7.50 an hour in a mere 7 months!

This new law is unprecedented and is the first time a state has enacted a minimum wage for healthcare workers. The workers covered under this new law include employees in various positions such as nurses, janitors, resident physicians, interns, housekeeping, groundskeepers, guards, clerical workers, food service workers, gift shop workers. In addition, various groups of healthcare workers will receive their pay increase at different increments. Employers (and their Human Resources Department) will need to become aware of the varying levels of minimum wage and when the amounts are set to increase.

The healthcare workers that benefit the most are those that work at hospitals or healthcare facilities with more than 10,000 full time employees, health care facilities that are part of an integrated health care system, county health care systems with 10,000 or more full-time employees, or those operated by a county with a population of more than 5 million. The workers that work in any of these hospitals or facilities will get their first pay raise on June 1, 2024 from $15.50 an hour to $23 an hour. Yes, you read that right. In less than 7 months, these employees will receive a raise of $7.50 an hour! By June 1, 2025, these workers will receive another increase to $24 an hour. By June 1, 2026, these workers will receive a third increase to $25 an hour. In a span of two years, these workers will receive approximately $10 more an hour!

For those health care workers that are employed at hospitals supported by government funds, rural health care facilities, or county facilities in areas with 250,000 or fewer residents, their minimum wage increases will be less impressive. These workers will receive their first pay raise on June 1, 2024 from $15.50 an hour to $18 an hour. Thereafter, these workers receive a 3.5% yearly increase until their minimum wage reaches $25 an hour June 1, 2033.

For healthcare workers in primary care clinics, community clinics, rural health clinics, and urgent clinics, their minimum wage will jump from $15.50 an hour to $21 an hour on June 1, 2024. Thereafter, their minimum wage will increase to $22 an hour on June 1, 2026. Finally, the wage will top out at $25 an hour on June 1, 2027.

For all other healthcare workers, their minimum wage will jump from $15.50 an hour to $21 an hour on June 1, 2024. Thereafter, their minimum wage will increase by $2 an hour every two years. The final increase to $25 an hour will occur on June 1, 2028.

The California legislature has set significant increases in minimum wages for these particular workers, far above the minimum wage for other industries. The legislature explained in the new law that “[h]igher wages are an important means of retaining an experienced workforce and attracting new workers. A stable workforce benefits patients and improves quality of care.” The legislature also stated that “[e]mployers across multiple industries are raising wages. The health care sector in California must offer higher wages to remain competitive.” Clearly, employers in other industries may find themselves increasing their employees’ hourly rate in order to remain competitive with the minimum wage increases the California legislature has set for both health care workers and fast food workers.