A proposal to increase the minimum wage for healthcare workers in California to $25 per hour has been approved by the state legislature and now awaits the signature of Governor Gavin Newsom.
Under the bill, the minimum wage hike to $25 an hour would apply to all healthcare facility employees, including cleaning and maintenance staff, food service workers, gift shop employees, medical coders, and nursing assistants. However, not all workers would see an immediate raise.
Small healthcare facilities would experience a more gradual phase-in
Large healthcare facilities with over 10,000 full-time employees and dialysis clinics would gradually increase their minimum wage to $23 an hour starting in 2024, followed by increases to $24 in 2025 and $25 in 2026. Small healthcare facilities would experience a more gradual phase-in; for instance, the minimum wage at urgent care clinics would reach $25 an hour by 2027, while skilled nursing facilities and other healthcare facilities wouldn’t reach $25 an hour until 2028.
The minimum wage requirement would have an even slower phase-in for rural hospitals and facilities serving higher numbers of patients enrolled in Medicare and Medi-Cal, California’s Medicaid program. In these cases, the wage floor would rise to $18 an hour in 2024 and gradually increase to $25 in 2033.
The bill also includes provisions requiring the state to establish a waiver program by the next year, allowing healthcare facilities in financial distress to temporarily postpone the minimum wage for healthcare workers in California increases. Additionally, it would prevent local ordinances from imposing higher minimum wage increases for a decade until 2034.
Minimum wage could raise to $25 California healthcare workers
Undetermined but definitely significant
SB 525, as the bill is known, was approved by lawmakers in the final hours of California’s legislative session, with the Assembly voting 59-11 and the Senate voting 31-9 in favor. The votes largely followed party lines, with Republican legislators opposing the measure. Governor Newsom now has 30 days to either sign the bill into law or veto it.
Governor Newsom has cautioned that he may veto some of the bills passed by the Democrat-controlled legislature due to the state’s projected budget deficit, which is anticipated to exceed $31 billion.
An earlier version of the bill estimated an annual cost of over $973 million for California to cover the expense of wage for healthcare workers in California increases at state-owned healthcare facilities. This estimate did not include an “undetermined but definitely significant” amount required to comply with wage parity requirements for non-healthcare workers at University of California system facilities.
The amended version of the bill that passed both chambers of the legislature is still undergoing cost calculations but is expected to be lower than the initial estimate, following revisions negotiated between SEIU California, which supported the measure, and healthcare industry groups representing hospitals and clinics.