California Acute Care Hospitals Must Reimburse Training Costs

Assembly Bill 2855, recently signed into law by Governor Newsom, will require that acute care hospitals in California reimburse employees and job applicants for certain training costs.

Currently, California Labor Code section 2802 requires California employers to reimburse employees for necessary business expenses.  New Section 2802.1, which becomes effective on January 1, 2021, expands existing law by extending the reimbursement obligation to employers providing education and training for job applicants seeking employment in “direct patient care positions” at “general acute care hospitals.”1  

Section 2802.1 does not define “job applicant.”  It does not include any qualification that the applicant conditionally accept a position, or undertake the training in good faith.

The key provisions of Section 2802.1 include the following:

  • Applies the reimbursement obligation of Section 2802 to any “employer-provided or employer-required educational program or training for an employee providing direct patient care or an applicant for direct patient care employment.”2
  • Defines “employer-provided or employer-required educational program or training” as including, but not limited to, “residencies, orientations, or competency validations necessary for direct patient care employment.”3
  • Excludes the following from the obligation to reimburse:4
    • Requirements for a license, registration, or certification necessary to legally practice in a specific employee classification to provide direct patient care.
    • Education or training that is voluntarily undertaken by the employee or applicant solely at their discretion.

Section 2802.1 also prohibits retaliation, permits injunctive relief, and requires that plaintiffs who prevail in an action to enforce the statute be awarded their reasonable attorneys’ fees and costs.

Proponents of the law include the California Nurses Association/National Nurses United.  Assembly Bill 2855 states that this new law is needed because some hospitals require training programs that confer no benefit on the trainees, and require new hires to sign contracts obligating them to repay the hospital for this training unless they stay on the job for a designated time.  Proponents say this “traps” nurses in their jobs and curtails their ability to seek “better-suited employment.” 

The supporters of the new law also cite the impact of the COVID-19 pandemic, a longtime nursing shortage in California, and a projected wave of retirements, with a resulting loss of years of clinical experience and increasing need for training.5 In those circumstances, it does seem likely that the educational and training programs covered by Section 2802.1 would make the recipients more attractive candidates for positions at other general acute care hospitals. 

Hospitals covered by this new law will want to consider carefully when they require or provide training to job applicants.  It seems likely that covered employers and job seekers may take to the courts to probe the limits of just who is a covered “job applicant.”  

See Footnotes

1 Section 2802.1(c) limits the scope of the section to “general acute care hospital[s]” as defined in Section 1250 (a) of the California Health and Safety Code.  Section 1250(a) sets out a lengthy definition, but it can be summarized for our purposes as a “facility having a duly constituted governing body … and an organized medical staff that provides 24-hour inpatient care, including the following basic services: medical, nursing, surgical, anesthesia, laboratory, radiology, pharmacy, and dietary services.”

2 Section 2802.1(a)(1).

3 Section 2802.1(a)(2).

4 Section 2802.1(a)(2)(A) and (B).

5 They offer the further explanation that “[e]mployers mandate training in every industry, but it is not the employee’s responsibility to pay for it, and therefore it shouldn’t be the potential employees’ responsibility either.” 

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.