California’s $23 Healthcare Minimum Wage Starts June 2026: What Orange County Families Need to Know

Robert Gordon

Home Care Policy Analyst · LinkedIn · April 3, 2026

15 min read

In less than 60 days, California’s healthcare worker minimum wage will jump to $23 per hour for home care workers employed by licensed home health agencies. If you’re an Orange County family relying on — or planning to start — professional in-home care, this change will directly affect what you pay, who shows up at your door, and how long they stay. Here’s everything you need to know about SB 525 and how to prepare.

What Is SB 525 — and Why Should OC Families Care?

California State Capitol, Sacramento — where SB 525 was signed into law in 2023

Senate Bill 525 is California’s landmark healthcare worker minimum wage law, signed by Governor Newsom in October 2023. Unlike the general state minimum wage ($16.90/hour in 2026), SB 525 creates a separate, higher pay floor specifically for workers at healthcare facilities — including licensed home health agencies.

The law uses a tiered system with different timelines based on employer size and type. For most home health agencies operating in Orange County, the relevant tier is Tier 3, which covers “all other covered healthcare facilities.” Under this tier, the minimum wage rises from $21 to $23 per hour on June 1, 2026 — a 9.5% increase in a single day.

Why does this matter for families? Because when caregiver wages go up, the cost of care follows. Orange County families already pay some of the highest home care rates in the state. Understanding this law helps you plan ahead, explore alternatives, and make informed decisions about your loved one’s care.

Who SB 525 Covers

SB 525 applies to employees of “covered health care facility employers,” which the statute explicitly defines to include licensed home health agencies. That means:

• Home health aides employed by licensed agencies
• Certified nursing assistants (CNAs) working in home settings through agencies
• Personal care attendants on an agency’s payroll
• Administrative and support staff at covered healthcare employers

Importantly, private-hire caregivers (those you employ directly without going through a licensed agency) are not directly covered by SB 525. However, market pressure means their rates will likely rise too — when agencies raise pay, independent caregivers adjust their expectations upward.

The Complete SB 525 Wage Timeline

The SB 525 wage schedule has four tiers affecting different types of healthcare employers

SB 525 doesn’t treat every healthcare employer the same. The law creates four distinct wage schedules depending on employer size and classification. Here’s the full breakdown:

For Orange County home health agencies under Tier 3, the key dates are:

• June 1, 2024 – May 31, 2026: $21/hour minimum
• June 1, 2026 – May 31, 2028: $23/hour minimum (upcoming change)
• June 1, 2028 onward: $25/hour minimum, then indexed to inflation annually

This means the $23/hour rate taking effect on June 1, 2026 is actually the midpoint of a longer journey to $25/hour. OC families should plan for sustained cost increases over the next two years — not just a one-time bump.

How Home Care Costs Will Change in Orange County

Orange County families face some of California’s highest home care costs

In Orange County, licensed home care agencies currently charge families between $38 and $45 per hour for non-medical in-home care. That rate includes the caregiver’s wage plus the agency’s overhead: insurance, workers’ compensation, payroll taxes, training, scheduling, and administrative costs.

When the caregiver minimum jumps from $21 to $23 per hour, agencies will need to absorb or pass through that $2/hour increase. Most agencies operate on thin margins — the home health industry in California reported operating at a deficit of over $50 million in 2022. That means the cost increase will almost certainly be passed on to families.

Projected Cost Impact

For a family using 40 hours per week of home care, the monthly increase could range from $370 to $520. Over a full year, that adds up to $4,440 to $6,240 in additional costs. For families already stretching their budgets, this is a significant financial shift that requires planning now — not in June.

Orange County vs. Statewide Comparison

Orange County’s costs run higher than many other California regions due to the high cost of living, competitive labor market, and concentrated demand from a large senior population. The county’s median home value exceeds $1 million, and that cost-of-living premium extends to care services.

The Silver Lining: Better Pay Means Better Care

Higher wages are linked to better caregiver retention and improved care quality

While higher costs are understandably concerning, there’s a compelling case that SB 525 will ultimately benefit the families it serves. The home care industry is in crisis mode: 59% of agencies report running with insufficient staffing, one in four clients needing care are being turned away, and the sector’s turnover rate sits at a staggering nearly 80%.

Low wages are the primary driver. When home care aides earn barely above minimum wage for physically and emotionally demanding work, they leave — often within the first 100 days. Roughly 70% of newly hired caregivers quit within their first three months. That revolving door means families experience inconsistent care, constant retraining, and the stress of introducing vulnerable loved ones to new faces repeatedly.

What Higher Wages Mean for Families

Research consistently shows that higher caregiver wages lead to:

• Lower turnover: Caregivers who earn a living wage stay longer, building meaningful relationships with clients
• Better applicant quality: Competitive pay attracts more skilled, experienced candidates to the profession
• Improved care outcomes: Consistent caregivers know their clients’ routines, preferences, and medical needs — reducing errors and hospital readmissions
• Greater reliability: Agencies with stable workforces have fewer last-minute cancellations and scheduling gaps

For Orange County families, this means the $2-3/hour increase in what you pay could translate into a caregiver who knows your mother’s medication schedule by heart, who understands your father’s communication style after his stroke, or who notices subtle changes that signal a health issue before it becomes an emergency.

The Caregiver Shortage in Orange County

The caregiving profession requires compassion and skill — competitive wages help attract and retain quality workers

Orange County faces a perfect storm of factors intensifying the caregiver shortage. The county’s population aged 65 and older has grown by 38% over the past decade, and by 2030, approximately 1 in 5 OC residents will be over 65. Meanwhile, the pool of working-age adults available for caregiving roles hasn’t kept pace.

Nationally, home care worker positions are projected to generate over 6.1 million total job openings between 2024 and 2034 — ranking second among all occupations in the entire country. California alone will need more than 1.2 million care workers by 2028, according to projections from the state’s Employment Development Department.

In Orange County specifically, the high cost of living creates an additional barrier. A caregiver earning $21/hour ($43,680 annually before taxes) cannot afford a one-bedroom apartment in most OC cities, where median rents exceed $2,400/month. Many caregivers commute long distances from the Inland Empire, adding hours to their workday without compensation.

How SB 525 Addresses the Shortage

Governor Newsom’s administration positioned SB 525 as a workforce stability measure. The logic: if you pay healthcare workers enough to live in the communities they serve, more people enter the profession, fewer leave, and the care system becomes more reliable for everyone.

Whether this plays out as planned depends partly on how quickly the broader economy adjusts. But the early data from Tier 1 employers (large hospital systems that already moved to $24/hour) shows promising trends in reduced turnover and improved recruitment.

IHSS and Public Program Alternatives

Programs like IHSS allow eligible families to receive care at no direct cost

For families concerned about rising costs, California offers several publicly funded programs that can reduce or eliminate out-of-pocket expenses for home care. Understanding your options is essential — especially as private agency rates climb.

In-Home Supportive Services (IHSS)

IHSS is California’s largest home care program, serving over 700,000 recipients statewide. In Orange County, IHSS providers currently earn $18.90 per hour — well below the SB 525 minimum for licensed agency workers. The program is administered through the Orange County Social Services Agency and covers:

• Personal care (bathing, dressing, grooming)
• Meal preparation and housekeeping
• Paramedical services under nurse supervision
• Transportation to medical appointments
• Protective supervision for cognitively impaired individuals

Eligibility requires Medi-Cal enrollment and functional limitations assessed by the county. Family members — including adult children and spouses — can serve as paid IHSS providers. If your loved one qualifies, IHSS remains one of the most valuable benefits available, even as the program faces its own budget pressures.

CalAIM Community Supports

Through CalOptima Health (Orange County’s Medi-Cal managed care plan), eligible members can access Community Supports — a set of services under the CalAIM initiative that includes personal care, respite, and home modifications. These services are available at no cost to qualifying Medi-Cal members and represent an expanding safety net as private care costs rise.

CalOptima has been navigating enrollment challenges in 2026, but the Community Supports program continues accepting new providers and participants.

Other Programs to Explore

• Veterans Aid & Attendance: Eligible veterans and surviving spouses can receive up to $2,431/month to help pay for home care
• PACE (Program of All-Inclusive Care for the Elderly): Orange County PACE provides comprehensive care coordination for qualifying seniors 55+
• RCOC Respite Services: The Regional Center of Orange County provides respite care for individuals with developmental disabilities through vendored agencies
• Long-Term Care Insurance: If purchased before care is needed, policies can cover $150-$300+/day in home care costs

What OC Families Can Do Right Now

Families can take proactive steps now to prepare for rising home care costs

With less than two months before the June 1 wage increase takes effect, now is the time to take concrete steps. Here are the most impactful actions OC families can take:

1. Talk to Your Current Agency

Ask your home care provider directly: “How will SB 525 affect our rates starting in June?” Get specifics in writing. Some agencies may phase in increases gradually; others may adjust all at once. Knowing the timeline lets you plan your budget accordingly.

2. Explore Hybrid Care Models

Consider combining agency care with family caregiving or IHSS. For example, you might use a professional agency for specialized tasks (medication management, physical therapy exercises) and rely on family members or IHSS providers for companionship and light housekeeping. This blended approach can significantly reduce costs while maintaining quality care.

3. Lock In Rates Where Possible

Some agencies offer rate guarantees for clients who sign longer-term agreements before price increases. Ask whether committing to a 6-month or 12-month service plan could lock in your current rate or reduce the increase.

4. Check Eligibility for Public Programs

If you haven’t explored IHSS, CalAIM, Veterans benefits, or PACE, now is the time. Many families qualify for assistance they don’t know about. The OC Office on Aging can help assess your options at no cost.

5. Consider Tax Benefits

Home care expenses may qualify for medical tax deductions or the Dependent Care Tax Credit. The IRS allows deductions for care that is primarily medical in nature, even if provided at home. Consult a tax professional to understand how your care expenses might reduce your tax burden.

Understanding the Federal Pressure: Medicaid Cuts and Home Care

State and federal policy decisions both affect what OC families pay for home care

SB 525 isn’t happening in a vacuum. At the federal level, massive Medicaid cuts under H.R. 1 are pulling funding in the opposite direction — reducing the federal dollars that support California’s home and community-based services by an estimated $30 billion per year.

This creates a squeeze: state law mandates higher wages (increasing costs), while federal policy cuts the funding that helps pay for care (reducing resources). For Medi-Cal recipients in Orange County, this could mean longer waitlists for services, reduced hours of authorized care, or narrower eligibility windows.

The California Legislative Analyst’s Office projects that the state will need to spend $1.1 billion more on Medi-Cal just to maintain current coverage levels — money that must come from other budget priorities or new revenue. Families relying on public programs should monitor 2026 Medi-Cal changes closely.

What This Means for OC Specifically

If California sustained a 10% cut to its five major home and community-based services programs between 2026 and 2030, the state’s Medi-Cal long-term care costs could increase by an estimated $1.17 billion — because people who lose home care often end up in far more expensive nursing facilities. With California’s nursing facility beds already at near-capacity (only 16,123 unfilled beds statewide in 2024), the system has very little slack.

OC Resources for Families Navigating Home Care Costs

Orange County offers multiple resources for families seeking affordable home care

Orange County has a robust network of organizations that can help families navigate the changing cost landscape. Here are the key resources to know:

• OC Office on Aging: Free care planning, benefits screening, and referrals — call (800) 510-2020
• CalOptima Health Member Services: For Medi-Cal managed care questions — (714) 246-8500
• Orange County Social Services Agency (IHSS): IHSS applications and assessments — (714) 825-3000
• Age Well Senior Services: Meals on Wheels, transportation, care management — (949) 855-8033
• Caregiver Resource Center of OC: Free support groups, respite grants, legal consultations for family caregivers
• Council on Aging – Southern California: HICAP (Health Insurance Counseling) helps navigate Medicare and Medi-Cal options
• At Home VA Staffing: Personalized home care with transparent pricing — call (213) 326-7452

Planning Your Home Care Budget for 2026 and Beyond

Professional caregivers provide essential support that helps seniors remain safely at home

SB 525’s wage increases don’t stop in June 2026. The trajectory to $25/hour by 2028 means home care costs will continue rising. Here’s how to build a sustainable care plan:

Think in Multi-Year Horizons

If your family is just beginning to explore home care, project costs out 2-3 years, not just next month. The difference between today’s rates and 2028’s rates could be $5,000-$10,000 annually for moderate care schedules. Factor in potential changes to your loved one’s care needs — conditions like dementia typically require increasing hours of support over time.

Build a Care Funding Strategy

Most families use a combination of funding sources. Map out every available dollar:

• Social Security and pension income dedicated to care
• Long-term care insurance benefits (check policy limits and waiting periods)
• Veterans benefits (Aid & Attendance, Housebound allowance)
• IHSS or CalAIM Community Supports
• Home equity (reverse mortgage for care funding — consult a financial advisor)
• Family contributions pooled into a care fund
• Tax deductions and credits for qualifying care expenses

The Value Equation

When evaluating care costs, consider the alternative. A semi-private room in an Orange County skilled nursing facility averages $10,000-$12,000 per month. Assisted living runs $5,500-$8,000 per month. Even at post-SB 525 rates, 40 hours per week of home care ($7,000-$8,300/month) remains competitive with facility-based care — and your loved one gets to stay in their own home, surrounded by familiar comforts.

As we’ve discussed in our guide to aging in place, the emotional and health benefits of remaining at home are well-documented. Home-based care is associated with lower rates of depression, fewer infections, and greater overall satisfaction for both the care recipient and their family.

Looking Ahead: The Road to $25/Hour and Beyond

SB 525’s June 2026 increase is just one milestone on a longer journey. By June 2028, the healthcare minimum wage for home health agencies will reach $25 per hour — and after that, it will be indexed annually to keep pace with inflation. For OC families, this means home care costs will continue rising for the foreseeable future.

But there’s reason for measured optimism. California is simultaneously investing in workforce development through the Master Plan for Aging, expanding Medi-Cal programs like CalAIM that provide alternative pathways to care, and supporting technology-enabled care solutions that can extend caregiver effectiveness. The goal isn’t just more expensive care — it’s a sustainable care system that serves everyone.

As we’ve covered in our analysis of 2026 home care trends and the Companionship Exemption Bill, the regulatory landscape for home care is shifting rapidly. Staying informed is your best strategy for protecting your family’s access to quality care at a price you can sustain.

The most important step? Don’t wait until June. Every week you spend preparing — checking program eligibility, talking to your agency, building a care budget — is a week of stress you avoid when the new rates take effect. Your loved one deserves continuity of care, and that starts with financial planning today.