California SB 525: Healthcare Worker Minimum Wage Rises to $25/Hour
California's tiered healthcare worker minimum wage under SB 525 reached $25/hour in 2026 for the largest covered facilities — large health systems, dialysis clinics, and facilities in the biggest counties. Other facility tiers are on slower schedules, and small physician groups are exempt entirely.
- California's tiered healthcare worker minimum wage under SB 525 stepped up again in 2026, reaching $25 per hour at the largest covered facilities — large integrated health systems, dialysis clinics, and facilities in counties with populations over 5 million.
- Other covered facilities, including many hospitals and physician groups with 25 or more physicians, are on a separate, slower schedule that reaches $25/hour in later years.
- Physician groups with 24 or fewer physicians are entirely exempt from SB 525's wage tiers.
- SB 525 includes a 10-year moratorium (through January 1, 2034) preempting local ordinances that would otherwise impose additional wage requirements on covered healthcare facility employees.
- This wage structure is separate from and in addition to California's general statewide minimum wage, which applies to non-healthcare employees and to healthcare employees not covered by SB 525's specific facility definitions.
What Changed and Why It Matters
California Senate Bill 525, signed into law by Governor Newsom, established a first-in-the-nation tiered minimum wage schedule specifically for healthcare workers at covered facilities, phased in over several years starting in 2024. The largest and best-resourced facility tier — large integrated health systems, dialysis clinics, and facilities located in counties with populations exceeding 5 million — reached the law's target rate of $25 per hour on its 2026 step-up date, following $23/hour and $24/hour in the two prior years.
Because SB 525 applies specifically to defined categories of "covered health care facilities" and "covered health care employees," it operates independently of, and in addition to, California's general statewide minimum wage. Employers with healthcare operations must determine facility-by-facility and role-by-role whether SB 525's tiers apply, since the law does not cover all healthcare employers uniformly.
| Effective Period | Hourly Minimum Wage |
|---|---|
| 2024 | $23.00 |
| 2025 | $24.00 |
| 2026 | $25.00 |
Applies to: integrated health systems and dialysis clinics with 10,000 or more full-time-equivalent employees, and covered facilities located in counties with a population over 5 million.
Other Covered Facility Tiers Move More Slowly
Not every covered healthcare employer is on the $25/hour-by-2026 timeline. SB 525 sets out a second track for most other covered facilities — including many hospitals, skilled nursing facilities, and physician groups above the size exemption threshold — that reaches $25/hour on a later schedule, and a third, slower track for certain community, rural, and specified clinic types. Employers should confirm which tier applies to each of their California healthcare facilities individually rather than assuming a single statewide rate.
Local Ordinance Preemption
SB 525 also included a ten-year moratorium, running from September 6, 2023 through January 1, 2034, that preempts California cities and counties from enacting or enforcing local minimum wage ordinances specifically targeting healthcare facility employees covered by the state law. This means covered healthcare employers do not need to separately track city- or county-level healthcare-specific wage ordinances during the moratorium period, though general local minimum wage ordinances that are not healthcare-specific may still apply to other employee categories at the same facility.