Newsom signs bill establishing 5 separate minimum wage schedules
California Governor Gavin Newsom has signed legislation that would push California’s health care workers’ minimum wage to $25 per hour.
On Friday, Newsom signed Senate Bill 525, which establishes five separate minimum wage schedules for covered health care employees.
With the new law, the minimum wage for covered health care employees will be $23 per hour starting June 1, 2024.
The wage will move up for $24 per hour starting June 1, 2025, and to $25 per hour by June 1, 2026.
The changes will apply to:
- any covered health care facility employer with 10,000 or more full-time equivalent employees (FTEE)
- any covered health care facility employer that is a part of an integrated health care delivery system or a health care system with 10,000 or more FTEEs
- a covered health care facility employer that is a dialysis clinic or is a person that owns, controls, or operates a dialysis clinic
- or a covered health facility owned, affiliated, or operated by a county with a population of more than 5,000,000 as of January 1, 2023
The changes come after 75,000 Kaiser Permanente hospital workers walked off the job earlier this month. The Coalition of Kaiser Permanente Unions said members have gone on strike to protest “bad faith bargaining” of Kaiser executives, Los Angeles Times reported.
Under the new law, hospitals with a high governmental payor mix, an independent hospital with an elevated governmental payor mix, a rural independent covered health care facility or a covered health care facility that is owned, affiliated, or operated by a county with a population of less than 250,000 as of January 1, 2023 will follow the following wage adjustment schedule:
- the minimum wage for covered health care employees will be $18 per hour from June 1, 2024 to May 31, 2033
- and $25 per hour from June 1, 2033, and until as adjusted as specified.
The legislation requires, for specified clinics that meet certain requirements, the minimum wage for covered health care employees to be $21 per hour from June 1, 2024, to May 31, 2026, inclusive, and $22 per hour from June 1, 2026, to May 31, 2027, inclusive, and $25 from June 1, 2027, and until as adjusted as specified.
The legislation also requires – for all other covered health care facility employers – the minimum wage for covered health care employees to be $21 per hour from June 1, 2024 to May 31, 2026; $23 per hour from June 1, 2026, to May 31, 2028; and $25 per hour from June 1, 2028, and until as adjusted as specified.
SB 525 also provides that a covered health care facility that is county owned, affiliated, or operated must implement the appropriate minimum wage schedule described above, as applicable, beginning Jan. 1, 2025.
California’s minimum wage will increase to $16 per hour for all employers on Jan. 1, 2024, up from the current $15.50 hourly rate. Also, Newsom recently signed legislation that gives workers five days of leave in case of loss of pregnancy.
‘Balance between supporting workers and protecting jobs’
A couple of stakeholders welcomed the development in California.
“SB 525 now strikes an important balance between supporting workers and protecting jobs and access to care in some of our most vulnerable communities,” said Carmela Coyle, president & CEO of the California Hospital Association.
“The bill creates a pathway to improving wages for our lower-wage health care workers, while also recognizing the needs of our state’s most troubled hospitals. And, by preempting local ballot measures on minimum wage and compensation, all health care workers will be paid equitably regardless of where they work. SB 525 demonstrates hospitals’ commitment to health care workers, patients, and communities.”
The law is a positive development for both health care workers and patients, said Tia Orr, executive director of SEIU California.
“Today California is putting a stop to the hemorrhaging of our care workforce by ensuring health care workers can do the work they love and pay their bills – a huge win for workers and patients seeking care,” said Orr.
“Californians saw the courage and commitment of healthcare workers during the pandemic, and now that same fearlessness and commitment to patients is responsible for a historic investment in the workers who make our healthcare system strong and accessible to all. We applaud Governor Newsom for signing this bill and making history for California as the first state to lift the floor on health care worker wages to $25.”
Earlier this month, Newsom vetoed Senate Bill 799, which sought to give striking workers the benefit of unemployment insurance (UI) after the first two weeks of unemployment due to a trade dispute. Giving the benefit could be detrimental to employers, he said in his veto message.
