UPDATE: Healthcare Minimum Wage Increase Effective Soon (We Think)

UPDATE: Healthcare Minimum Wage Increase Effective Soon (We Think)

If you’re in the healthcare field or your company is at all connected to the healthcare industry, you’ve been following the status of California’s rising minimum wage for healthcare workers. The increase was supposed to be effective on June 1, 2024, but was delayed to July 1, and then delayed again to possibly October 15.

With this date quickly approaching, healthcare employers should be prepared for two possible announcements that would trigger the higher wage requirements.

The first trigger has to do with 3rd quarter cash receipts (taxes received) reported by the California Department of Finance. If that amount is at least 3% higher than what was projected in the state’s 2024 budget, the minimum wage will go into effect on October 15. If this is the case, we will be notified by the State Director of Finance sometime after the close of the 3rd quarter, meaning on or after October 1, 2024. This will leave, at most, 14 days for employers to implement the necessary wage increases.

The second trigger has to do with data retrieval related to hospital quality assurance fees. These fees could potentially offset the costs associated with minimum wage increases. Once this data retrieval process is initiated, the State Department of Health Care Services will notify the Legislature. The minimum wage increase would then go into effect 15 days later but no later than January 1, 2025. Again, this leaves just 15 days for employers to be notified before the change goes into effect. Currently, there is no known legislative effort to delay the minimum wage increases further beyond January 1, 2025.

We know these updates are complex – if you click on either of the links above, your head may be spinning from the list of subparagraphs and subdivisions that indicate how decisions will be made. Healthcare employers are encouraged to review their compensation plans and be prepared for notification that the wage increases could go into effect as soon as October 15. Sierra HR Partners will keep you informed of any news on this topic.