California Senate Bill 525: Health Care Minimum Wage

California’s SB 525 sets a separate minimum wage for health care workers that ranges from roughly $19 to $25 per hour in mid-2026, depending on the type of facility you work at. The law took effect on October 16, 2024, and covers a much broader group than clinical staff alone. If you work at a covered facility, the California SB 525 health care minimum wage likely applies to you, whether you’re a nurse, a janitor, a medical coder, or a cafeteria worker.

Who Is Covered

The definition of “covered health care employee” is wider than most people expect. It reaches anyone working at a covered health care facility who provides patient care, health care services, or services that support the delivery of health care. That last phrase does most of the work, because it pulls in roles that never touch a patient.

The statute specifically lists nurses, physicians, caregivers, medical residents, interns, patient care technicians, janitors, housekeeping staff, groundskeepers, guards, clerical workers, nonmanagerial administrative workers, food service workers, gift shop workers, medical coders and billers, schedulers, call center and warehouse workers, and laundry workers. It applies “regardless of formal job title,” so your actual duties and work location decide coverage, not what your employer calls the position.¹

Contractors and subcontractors are covered too, as long as they work primarily on the premises of a covered facility providing health care or support services. “Primarily” means more than half of your work time during a given workweek. Even if a staffing agency signs your paycheck, the health care minimum wage applies to hours you spend doing covered work at the facility.²

A few narrow exclusions apply: outside salespeople, public-sector employees whose primary duties aren’t health care services, and delivery or waste collection workers who don’t work for the entity that owns or operates the facility.¹

The Four Facility Tiers and 2026 Rates

SB 525 does not set one flat wage. It creates four tiers based on facility type, size, and funding sources, and your minimum wage depends on which tier your employer falls into. For reference, California’s general minimum wage is $16.90 per hour in 2026, and every health care tier pays meaningfully more.³

Tier A: Large Systems, Dialysis Clinics, and Large County Facilities

This tier covers integrated health systems or hospitals with 10,000 or more full-time equivalent employees, dialysis clinics, and health care facilities owned or operated by counties with more than five million residents (effectively Los Angeles County). The rate is $24 per hour through the first half of 2026 and rises to $25 per hour on July 1, 2026.⁴² Starting January 1, 2028, Tier A wages are adjusted annually for inflation.

Tier B: Rural, Safety Net, and Small County Facilities

This tier includes rural independent hospitals, hospitals where Medicare and Medi-Cal account for 75% or more of patient days (or 90% or more for system-affiliated hospitals), and facilities run by counties with fewer than 250,000 residents. The minimum wage reaches $19.28 per hour on July 1, 2026, climbing through annual 3.5% increases, and does not hit $25 per hour until 2033.⁴

Tier C: Community Clinics and Rural Health Clinics

Unaffiliated primary care clinics, community clinics, rural health clinics, and urgent care clinics connected to those facilities have their own schedule. The wage is $21 per hour through June 30, 2026, then rises to $22 per hour on July 1, 2026, and continues climbing to $25 per hour by 2029.²

Tier D: All Other Covered Facilities

Every covered facility that does not fit the three categories above lands here. Many mid-sized hospital systems and medium-sized county facilities are in this tier. The wage is $21 per hour through June 30, 2026, jumps to $23 per hour on July 1, 2026, and holds at $23 through June 30, 2028, before reaching $25 per hour.⁴

Skilled Nursing Facilities

Skilled nursing facilities that aren’t operated by a hospital or large health system have a conditional schedule. Their increases only apply when a separate patient care minimum spending requirement for skilled nursing facilities is in place. When that requirement is active, these facilities follow the Tier D schedule: $21 per hour through June 30, 2026, rising to $23 per hour on July 1, 2026.¹

What Salaried Exempt Workers Must Earn

SB 525 is not only an hourly-wage law. Salaried employees classified as exempt from overtime must earn an annual salary equal to the greater of 150% of the applicable health care minimum wage or 200% of California’s general state minimum wage, calculated for full-time work.

For Tier A facilities at $25 per hour on July 1, 2026, that translates to an exempt salary floor of at least $78,000 per year ($25 × 2,080 × 1.5). At Tier D facilities reaching $23 per hour that same date, the floor works out to about $71,760 per year. For lower-tier facilities, 200% of the general state minimum wage (roughly $70,304 at $16.90 × 2,080 × 2) may actually be the higher number, in which case that figure controls. If you’re salaried and classified as exempt, your employer cannot simply skip the increase by pointing to your exempt status. The salary test still has to be met.²

When the Law Took Effect and What’s Next

SB 525 was signed in October 2023, but the first wage increases didn’t arrive right away. The law tied its start date to a notification from the Department of Health Care Services, which came on October 1, 2024. The minimum wage provisions took effect 15 days later, on October 16, 2024. County-owned facilities were not required to comply before January 1, 2025.²¹

Two cleanup bills, SB 828 and SB 159, were signed in 2024 and adjusted the implementation dates and some tier definitions. The current schedules published by the Department of Industrial Relations and in the California Code of Regulations already reflect those changes. After all tiers reach $25 per hour (2028 for Tier A, 2033 for Tier B), the rate will be adjusted for inflation each year. The DIR FAQ does not specify which price index applies or cap the size of annual adjustments.²

Hardship Waivers for Clinics

Clinics that genuinely cannot afford the increases can apply for a one-year delay through the Department of Health Care Access and Information. The bar is deliberately high, and the waiver is not available to hospitals. To qualify, a clinic must submit audited financial statements, year-to-date internally prepared financials no older than 45 days, and a CPA-examined forecast showing that compliance would raise doubt about the clinic’s ability to maintain positive cash flow over the next 12 months.⁵

The clinic must also show fewer than 45 days of cash on hand and a current ratio (current assets to current liabilities) of one or less. An authorized executive officer has to sign a declaration verifying the documents. A parent company’s financials count too, so a clinic cannot qualify if its parent organization is financially healthy.⁶

If You’re Being Underpaid

If your employer isn’t paying the health care minimum wage that applies to your facility tier, you have three options. You can file an individual wage claim with the Labor Commissioner’s Wage Claim Adjudication Unit, file a Report of Labor Law Violation with the Labor Commissioner’s Bureau of Field Enforcement (which investigates employers rather than pursuing individual claims), or file a lawsuit in court. If your employment agreement requires arbitration, that process may apply instead.²

A successful claim can recover unpaid wages along with related damages and penalties. Keep your own records of hours worked, your pay stubs, and your facility’s name and ownership structure. Which tier your employer falls into determines the wage you’re owed. If you’re not sure, the Department of Health Care Access and Information publishes a list of facilities with 10,000 or more full-time equivalent employees, which at least tells you whether your employer is in the fastest-moving Tier A.

1
LegiScan. Bill Text: CA SB525 – 2023-2024 – Regular Session – Chaptered
2
California Department of Industrial Relations. Health Care Worker Minimum Wage Frequently Asked Questions
3
California Department of Industrial Relations. Minimum Wage
4
California Code of Regulations. Minimum Wage Order Supplement for Health Care Facilities
5
Department of Health Care Access and Information. Senate Bill 525 – Clinic Minimum Wage Waiver Program
6
California Department of Industrial Relations. Waiver Application