Rate Changes Due to the Minimum Wage Increase – January 1, 2025
Due to the enactment of Senate Bill (SB) 3, the California minimum wage increased to $16.50 per hour, effective January 1, 2025, for all employers. As a result, a number of regional center vendors may be eligible for a rate adjustment in order to pay employees the new minimum wage.
Which Providers/Services Are Eligible?
All providers of services with rates established in the following ways may receive or be eligible for a rate adjustment:
- Rates included in rate reform
- Department Set Rate – Service Code 525 (Social Recreation)
- Rates set by regional centers through negotiation
How Will Rates Be Adjusted?
This depends on how the service rate was set initially.
Rates included in rate reform
For providers with rates included in rate reform, the increase in minimum wage will be included in their rate at full implementation effective January 1, 2025 and do not need to submit a request for a rate adjustment. The benchmark rates effective January 1, 2025 increased by updating the wages used in the rate models for direct care staff and supervisors to accommodate for wage growth due to the new minimum wage. The benchmark rates effective January 1, 2025, are available on the Benchmark Rates Information Page. If a provider’s existing rate is above the new benchmark, the provider will not receive an increase for minimum wage. Their existing rate will be held harmless through June 30, 2026.
Department Set Rate
Social Recreation Programs may request a rate adjustment from the Department if any employee is paid less than the new minimum wage.
Rates Set by Regional Centers through Negotiation:
Rates for a variety of services are set through negotiation between providers and regional centers. Providers with rates set in this manner may negotiate a rate adjustment with the regional center, if applicable to the new minimum wage increase. Providers should contact their local regional center for more information on submitting rate adjustment requests.
Where Can I Get More Information?
- You can contact your local regional center or review the letter from the Department to regional centers regarding the minimum wage increase.
- OR
- You can contact the Department of Developmental Services for questions at rateadjustrequest@dds.ca.gov.
Instructions & Workbook
The following are instructions for programs vendored with regional centers under service code 525. For all other service codes refer back to your regional center.
The workbook below should be used by applicable vendors to submit rate adjustment requests to the Department. Rate adjustment requests must be submitted no later than March 1, 2025. Any rate adjustments approved will be effective January 1, 2025.
For Social Recreation Programs
Past Minimum Wage
Last modified: December 27, 2024
