California Labor Code Section 2802 requires that employers reimburse employees for any “necessary expenditure or loss incurred by the employee in direct consequence of the discharge of the employee’s duties.” 

The California legislature has decided to clarify that obligation for acute care hospitals to address the shortage of health care professionals and to relieve employees from the costs of employer-mandated educational programs or trainings.

Assembly Bill No. 2588, which takes effect January 1, adds Section 2802.1 to the Labor Code and requires general acute care hospitals to reimburse certain training and education costs incurred by current employees or applicants for employment.

The legislature observed that some health care employers have tried to skirt the reimbursement requirement by inserting contractual provisions that impose the cost of job training on applicants.

What is a "general acute care hospital"? 

Health and Safety Code section 1250(a) provides that a general acute care hospital is a “health facility” having a “governing body with overall administrative and professional responsibility and an organized medical staff that provides 24-hour inpatient care.”   

What does the new law require?

Based on the spirit of Section 2802, Section 2802.1 requires general acute care hospitals to reimburse

• An employee or applicant for employment
• Who provides direct patient care
• For any expenses or costs incurred in connection with an employer-provided or employer-required educational program or training.

It is unlawful for employers to retaliate against any covered employee or applicant who refuses to enter into an agreement that violates the reimbursement law.   

What are “employer-provided or employer-required” educational programs or training?

“Employer-provided or employer-required” educational programs or trainings include, but are not limited to, the following:

• Residencies
• Orientations
• Competency validations.

Each must be “necessary for direct patient care employment.“ This simply means that the educational programs or trainings must be required for the employee or applicant for employment to provide direct care to patients. For example, Title 22 of the California Code of Regulations section 70214 requires nurses involved in patient care to undergo competency validations (as designed by the general acute care hospital for the specific patient care units or patient assignments) and mandatory education based on current standards of nursing practice and established standards of staff performance.  Thus, under section 2802.1, the general acute care hospital would be required to reimburse any costs incurred by the nurses to complete these trainings or competency validations.

Are there exceptions?

Yes. General acute care hospitals are not required to reimburse employees or applicants for the costs or expenses related to

• The requirements for a license, registration, or certification necessary to legally practice in a specific employee classification to provide direct patient care.
• Any education or training that is voluntarily undertaken solely at the discretion of the employee or applicant.

Next steps for California general acute care hospitals

This new law does not specify whether the educational programs or trainings also need to relate to providing direct patient care. Nevertheless, the broad language of the statute suggests that reimbursement may apply to most, if not all, employer-provided or required educational programs or trainings.

Additionally, because Section 2802.1 does not provide an exhaustive list of applicable educational programs and trainings, general acute care hospitals should (1) revise or develop a policy or procedure for reimbursement for educational programs and trainings, and (2) establish criteria to consistently assess whether an educational program or training qualifies for reimbursement.