In October 2023, Governor Newsom signed Senate Bill No. 525 (“SB 525”), which establishes minimum wage schedules for “covered health care employees” depending on the type of facilities in which they work, and raises the minimum wage for many healthcare facilities to $21 per hour. SB 525 would have raised the minimum wage on June 1, 2024 for many of these facilities. However, on Monday, May 20, 2024, State Senator Mara Elana Durazo, the bill’s author, submitted paperwork for legislation that would delay the increase.  Senate Bill No. 828 (“SB 828”) moves the start date of the health care minimum wage law by one month to July 1, 2024.

The goal of SB 828 is to give the state more time to implement the minimum wage schedules while lawmakers are dealing with a projected state budget deficit in the billions. Delaying the enactment of the health care minimum wage has featured prominently in the budget-related negotiations between Governor Newsom and the Legislature. This delay would give the state time to address the estimated $4 billion annual increase in costs due to the minimum wage increase.

The timing of when the state legislature plans to pass the measure and send it to the Governor is unclear. But State Senator Durazo confirmed that those involved in negotiations are “still going to be in that conversation all the way to June 15.”

Key Takeaways:

  • As we await guidance from the Legislature, employers should determine whether their workers are subject to any of the minimum wage increases and whether their business qualifies for a waiver.
  • Employers should also consult with their employment attorneys and ensure their employee policies and pay practices comply with the new minimum wage requirements.