Topic

THE SMALL BUSINESS JOB PROTECTION ACT OF 1996 - P.L. 104-188
(The Minimum Wage Bill)

Signed into law: Aug. 20, 1996
Effective Date: Oct. 1, 1996

Summary

A 90 cent increase in the minimum wage became law on Aug. 20, 1996. The new

minimum wage will be phased in over the next year, increasing 50 cents to $4.75 this Oct. 1, and to $5.15 on Sept. 1, 1997.

Implications for hospitals and health systems

  • For minimum wage workers, hospitals will pay higher wages. About 2 percent of hospital and health system employees earn the minimum wage. (The figure is 3.3 percent for the broader category of health care workers and 9.3 percent for nursing home employees.) The overall impact on hospitals' wages is likely to be minimal.
  • Know your state minimum wage laws. State law applies if higher than the federal standard.
  • Make sure wage increases are put in place according to the time schedule set by the law.
  • A higher minimum wage means higher costs for hospitals. And that will affect the hospital market basket that's used to help calculate Medicare payments to hospitals. The bottom line: The new minimum wage will result in a $70 million increase in Medicare PPS reimbursements to hospitals and health systems for FY 1997.

 

 

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