diff --git a/salt/utils/cache.py b/salt/utils/cache.py
index 624653c33f8e..d3a8084251d8 100644
--- a/salt/utils/cache.py
+++ b/salt/utils/cache.py
@@ -358,7 +358,7 @@ def verify_cache_version(cache_path):
     :return: True if cache version matched. False if cache version did not match.
     """
     if not os.path.isdir(cache_path):
-        os.mkdir(cache_path)
+        os.makedirs(cache_path)
     with salt.utils.files.fopen(
         salt.utils.path.join(cache_path, "cache_version"), "a+"
     ) as file:
diff --git a/tests/pytests/functional/utils/test_cache.py b/tests/pytests/functional/utils/test_cache.py
new file mode 100644
index 000000000000..c2037f84c435
--- /dev/null
+++ b/tests/pytests/functional/utils/test_cache.py
@@ -0,0 +1,70 @@
+import os
+
+import salt.utils.cache
+import salt.utils.files
+import salt.utils.path
+
+_ROOT_DIR = (
+    "data.txt",
+    "foo.t2",
+    "bar.t3",
+    "nested/test",
+    "nested/cache.txt",
+    "n/n1/n2/n3/n4/n5",
+)
+
+
+def _make_dummy_files(tmp_path):
+    for full_path in _ROOT_DIR:
+        full_path = salt.utils.path.join(tmp_path, full_path)
+        path, _ = os.path.split(full_path)
+        if not os.path.isdir(path):
+            os.makedirs(path)
+        with salt.utils.files.fopen(full_path, "w") as file:
+            file.write("data")
+
+
+def _dummy_files_exists(tmp_path):
+    """
+    True if all files exists
+    False if all files are missing
+    None if some files exists and others are missing
+    """
+    ret = None
+    for full_path in _ROOT_DIR:
+        full_path = salt.utils.path.join(tmp_path, full_path)
+        path, _ = os.path.split(full_path)
+        is_file = os.path.isdir(path) and os.path.isfile(full_path)
+        if ret is None:
+            ret = is_file
+        elif ret is not is_file:
+            return None  # Some files are found and others are missing
+    return ret
+
+
+def test_verify_cache_version(tmp_path):
+    tmp_path = str(tmp_path)
+    cache_version = salt.utils.path.join(tmp_path, "cache_version")
+
+    # check that cache clears when no cache_version is present
+    _make_dummy_files(tmp_path)
+    assert salt.utils.cache.verify_cache_version(tmp_path) is False
+    assert _dummy_files_exists(tmp_path) is False
+
+    # check that cache does not get clear when check is called multiple times
+    _make_dummy_files(tmp_path)
+    for _ in range(3):
+        assert salt.utils.cache.verify_cache_version(tmp_path) is True
+        assert _dummy_files_exists(tmp_path) is True
+
+    # check that cache clears when a different version is present
+    with salt.utils.files.fopen(cache_version, "w") as file:
+        file.write("-1")
+    assert salt.utils.cache.verify_cache_version(tmp_path) is False
+    assert _dummy_files_exists(tmp_path) is False
+
+    # check that cache does not get clear when check is called multiple times
+    _make_dummy_files(tmp_path)
+    for _ in range(3):
+        assert salt.utils.cache.verify_cache_version(tmp_path) is True
+        assert _dummy_files_exists(tmp_path) is True