- California Governor Gavin Newsom on Friday signed a law raising the minimum wage for thousands of healthcare workers in the state from $15.50 an hour to $25 an hour.
- State lawmakers argued in the text of the law that competitive wages are necessary to attract and retain healthcare workers who provide critical services, saying that “even before the COVID pandemic, California faced an urgent and urgent shortage of healthcare workers, which affects the health and well-being of Californians.”
- Although the wage increase will begin next year, the implementation timeline depends on the type of facility. Large health systems with more than 10,000 workers and dialysis clinics must implement the law in full by 2026, while rural independent hospitals and those with a high mix of Medi-Cal patients and Medicare have until 2033 to implement new minimum wages.
Dive Insights:
The law, backed by California healthcare unions, broadly defines healthcare workers as full-time or contract employees of a healthcare facility, including those in roles that support the provision of healthcare, such as janitors, clerical workers, food service workers, and medical billing personnel.
The wage increase is expected to affect approximately 469,000 employees, most of whom live on the margins, according to an analysis from the University of California, Berkeley’s Labor Center.
Nearly half of California’s healthcare workforce does not currently have enough income to meet basic needs, such as housing, and is enrolled in public safety net programs, according to the UC Berkeley Labor Center.
Newsom signed the bill into law on the same day Kaiser Permanente unions announced they won a tentative $25 an hour minimum wage for more than 60,000 California-based Kaiser employees, who have been waiting to be approved by the members. California healthcare workers were represented by SEIU-United Healthcare Workers West president Dave Regan during Kaiser bargaining.
In the Senate’s analysis of the minimum wage bill that was made in May and September, the legislators said that SEIU-UHW organizing elsewhere in the state prompted an analysis of the state’s level of pay. The union passed several similar local ordinances last year, including in Los Angeles and San Diego.
SEIU California, which sponsored the bill, released a statement Friday saying raising health workers’ wages is a matter of fairness. Three out of four workers who will see a wage increase thanks to the new law are women, and 76% are workers of color, according to SEIU California. Nearly half of all healthcare workers affected are Latino, the union said.
“Governor Newsom signed SB 525 into law because he heard our call for change in a status quo that leaves us tired and struggling to pay our bills,” Dr. Kelley Butler, resident physician at San Francisco General Hospital and member of SEIU California, said in a statement. “I am proud of our collective advocacy as a union and proud of our governor for doing right by the California healthcare workforce and the patients it serves.”
The law has undergone several edits since the start of the legislative session to make it more palatable to healthcare facilities, many of which opposed its passage earlier this year. An earlier version of the bill, which was debated in May, mandated all healthcare providers institute the new minimum by June 2025.
The final version of the law has a phase-in approach that gives some workers the new minimum in 2026 and leaves others waiting ten years to reap the full amount. Healthcare facilities that are in financial difficulty can also apply for a waiver program to temporarily delay salary increases. Tribal clinics are excluded entirely from the new salary requirements.
The California Hospital Association, a lobbying organization, ultimately supported the law, saying in a statement that it provides “stability and predictability for hospitals” by providing more reasonable requirements. to phase in and “prioritize city and county minimum wage measures for 10 years and local compensation measures for six years.”
The dialysis industry also got on board after lawmakers added an amendment preventing SEIU from pushing ballot measures targeting dialysis centers. Unsuccessful union lobbying for changes in the dialysis industry has cost the healthcare industry more than 100 million dollars in recent years, according to a report from CalMatters.
