As many physicians are aware, Governor Newson signed Senate Bill 525 (SB 525), the healthcare minimum wage bill, into law in October of 2023. Originally approved to take effect on June 1, 2024, SB 525 requires certain healthcare facilities to pay a special minimum wage to their employees based on a tiered implementation schedule.
Due to the immense impact on the state budget, the effective date of SB 525 was pushed back to July 1st of 2024 to allow for further review of the state budget and the impact that SB 525 would have on California. The implementation date was yet again pushed back to October 15th of 2024.
The October 15th deadline was contingent upon the state bringing in at least a 3% increase in revenue than is currently expected in first quarter of the upcoming fiscal year or upon the collection of data that would allow for federal funding.¹ According to Ana B. Ibarra of CalMatters, the implementation of SB 525 will cost the State of California $4 billion, of which half would come from the state’s general fund which is facing a projected $28 billion deficit.¹
After several delays, SB 525 is effective as of October 16, 2024. Although small independent medical offices with fewer than twenty-five physicians are generally exempt from SB 525, many have already implemented a tiered pay increase in their budgets due to hiring competition in the healthcare space.
For those practices or entities to which SB 525 applies, immediate action is required to implement the minimum wage increase schedule, if they have not already done so.
For additional information or guidance, please contact CAP’s Assistant Vice President of Practice Management Services, Andie Tena at 213-473-8630.
¹Ibarra, Ana B., “California’s new health care minimum wage is changing. Here are answers to your questions,” CalMatters, June 22, 2024, https://calmatters.org/health/2024/06/health-care-minimum-wage/
Andie Tena is CAP’s Assistant Vice President of Practice Management Services. Questions or comments related to this column should be directed to ATena@CAPphysicians.com.