California Senate Bill 525 requires certain healthcare employers in California to raise essentially all staff, including clerical and support staff, to a new minimum wage starting June 1, 2024. For medical groups of 25 or more physicians, the increase goes to $21/hour on June 1, 2024, and to $25/hour in 2028.
For dialysis clinics and physician groups part of a large health system with more than 10,000 workers, the minimum wage goes to $23/hour on June 1, 2024, and to $25 in 2026. See this link on the California Medical Association’s website for more details.
The CMA has been successful in obtaining exemptions for IPAs and practices with less than 25 physicians. The bill was signed on October 13, 2023, but opponents feel that they may be able to delay the June 1, 2024 start. Others say that undoing one portion of the law threatens all of the other compromises and deals that were set between labor and the health industry, so any delay or alteration of the law as signed is unlikely.
This will affect the way medical groups organize and consolidate in the future. We encourage you to stay connected with the AMA and the CMA for guidance on matters that affect your practices. And, your LSL advisor is always here to help.
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