Under the state's wages cap, public sector pay increases cannot exceed 2.5 per cent but the Health Services Union maintains this is not enough as inflation runs at 3.5 per cent.
The union is campaigning for a 5.5 per cent increase "to account for the impact of the pandemic and the surging cost of living".
Hundreds of ambulance staff, security guards, cleaners, paramedics and other hospital workers packed Trades Hall in central Sydney on Thursday.
"The government knows the cost of living is skyrocketing," Nepean Hospital chief radiographer Andrew Teece told the crowd waving placards and flags.
"This government bluntly refuses a pay increase ... to meet our household bills.
"We want better pay to support ourselves and our families."
The strike is designed to put pressure on the government before a conciliation hearing at the Industrial Relations Commission next week.
Lui Bilal, a 48-year-old security guard at Westmead Hospital, said the increase would recognise the work of an underpaid labour force.
"We are already underpaid and management is pushing us to do more work with not enough staff," he told AAP.
He said he attended Thursday's strikes out of a sense of conviction, likening the industrial action to a 2019 movement in his country of birth, Iraq, that unseated its unpopular prime minister.
"All we ask for is to be respected ... even if this percentage is low at least we're being recognised," Mr Bilal said.
Health Minister Brad Hazzard said the government was negotiating with the union in good faith.
"We'd all prefer no strikes but we will continue to work with the organisations that represent our incredible 140,000 staff who make up the biggest government health agency in the nation," an official from his office told AAP.
The planned industrial action included stopping work for four hours at major metropolitan hospitals and two hours at regional hospitals.
Premier Dominic Perrottet said the government has done enough to assuage the financial strains facing health workers.
"The NSW government has led the way when it comes to wage increases across the country and this has been lost in the debate," he said on Wednesday.
"A 2.5 per cent pay increase annually over this period of time has far exceeded private sector wage growth."
But health workers said they have not been rewarded financially for their efforts as frontline staff at the height of the COVID-19 pandemic.
"We're the ones who turned up to work and didn't work from the safety of our own homes," said Alana Fernandez, a patient transport worker from Prestons in Sydney's southwest.
Labor MP Alex Searle, who attended the rally in support of the workers, said the discontent across the public sector is "the result of a decade of neglect" by the state government.
"The least government can do is make sure wages are fair, because inflation is stripping the bones of working people's ability to provide for their families," he told AAP.
Westmead Hospital cleaner Leah Hampton said she was finding it hard to make ends meet.
"Most of us are doing double and triple the work originally assigned to us and we don't get paid overtime or extra compensation for it," she told AAP.
"I can't afford buying meat anymore to feed my three teenagers and a toddler with prices going up".
The stoppages follow similar action by paramedics and nurses last week.
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