On October 13th, Governor Newsom signed into law Senate Bill 525 (SB 525), a piece of legislation that raises the minimum wage for healthcare workers to $25 an hour. SB 525, which introduces Labor Code sections 1182.14 and 1182.15, has far-reaching implications, particularly affecting healthcare employers in California.
SB 525's reach is quite vast, encompassing a wide array of healthcare employers, from clinics and hospitals to home health agencies. The legislation also broadens the definition of "healthcare" positions, now including virtually all healthcare workers, from nurses and physicians to janitors and clerical staff.
Covered employers are subjected to extensive regulations, including acute care hospitals, clinics, and home health agencies. This comprehensive coverage brings with it a multitude of burdens for employers, including increased administrative and operational reporting duties. Some exceptions exist, but for the majority of healthcare employers, they will have to abide by all the requirements of SB 525.
SB 525 also imposes strict limitations on employers' ability to maintain employees' exempt status from overtime and minimum wage. To continue to qualify as exempt, employees must receive a monthly salary equal to at least 150% of the healthcare worker minimum wage, or 200% of the prevailing state minimum wage for all workers as specified in Section 1182.12, whichever amount is higher, provided they are engaged in full-time employment.
SB 525, in its pursuit of a $25 per hour minimum wage for healthcare workers, inflicts rapid and steep increases. The rate at which this new minimum wage is implemented depends on the size and type of the healthcare employer, putting immense pressure on employers. For larger employers, hourly employees, and those on a "salary basis," the minimum wage hikes are swift, beginning in 2024 and extending to 2026.
In response to the hardships imposed by SB 525, employers are left with little choice but to seek waivers to cope with the new wage scales. To qualify for a waiver, employers must navigate a cumbersome process, providing exhaustive financial documentation. This places an additional administrative and financial burden on employers already grappling with the law's requirements.
Employers with collective bargaining agreements are not spared from SB 525's harsh effects. They must engage legal counsel to navigate the labyrinth of regulations and understand how the legislation impacts their agreements. This uncertainty adds a layer of complexity and potential disputes, further exacerbating the challenges employers face.
In conclusion, SB 525 imposes more burdens on California healthcare employers, with employers left to grapple with a new complex web of requirements and regulations, with potential legal and financial consequences for non-compliance. California employers now find themselves navigating treacherous waters, weighed down by the hardships of SB 525.
If you are a California employer facing the complex and challenging landscape of SB 525 and its significant impact on your business, it's imperative to seek legal counsel today. Protect your business, employees, and future by taking proactive steps and securing the right legal support.