California Governor Gavin Newsom has signed legislation raising the minimum wage for healthcare workers in the state to $25 an hour. The law will benefit about 469,000 employees statewide starting from next year, with wages gradually increasing over the next decade. The move comes after labor unions and healthcare employers reached an agreement to increase the industry’s minimum wage, with unions agreeing to a 10-year freeze on local ballot measures to force pay rises at hospitals and other medical facilities.
California Health Care Workers to Earn $25 Minimum Wage
California health care workers are to receive a pay raise, as Governor Gavin Newsom signs a law setting their path to a $25 minimum wage. The law, which seemed unlikely earlier in the year, will benefit hundreds of thousands of medical technicians, nursing assistants, custodians, and more. The wage hike will be implemented gradually from next year.
Unions representing lower-paid Kaiser Permanente employees announced a new contract on the same day, securing a $25 minimum wage for the health care giant’s California workers. Tia Orr, executive director of SEIU California, hailed the move as a win for workers and patients alike.
Newsom’s approval of a new pay floor for medical workers comes on the heels of a separate law mandating a new pay floor for fast-food workers. Starting from April next year, fast food employees will earn at least $20 an hour. Approximately 900,000 Californians are projected to benefit from these industry-specific minimum wage increases.
The health worker pay raise was achieved through a rare agreement between the hospital lobby, health care providers, and labor unions. Health care employers supported the minimum wage increase, while unions agreed to a 10-year moratorium on local ballot measures for pay raises at hospitals and other medical facilities.
Senate Bill 525, authored by Sen. Maria Elena Durazo of Los Angeles, was passed with the support of both labor and industry. Assembly Speaker Robert Rivas praised the consensus, noting its role in solving problems and meeting Californians’ expectations.
The new law is anticipated to benefit about 469,000 employees statewide, including those earning slightly more who would see a corresponding pay boost. The increase is expected to make a significant difference to employees like Eneryk Santana, a medical assistant at a clinic in Chula Vista, who commutes from Tijuana daily to avoid high California living costs.
Implementation of Minimum Wage Increases
The timeline for workers to reach the increased pay levels depends on their workplace type. For instance, community clinics will need to implement a $21 minimum wage by next year and $25 by 2027. Large health systems and dialysis clinics with over 10,000 workers will have to pay a minimum wage of $23 per hour in 2024, $24 in 2025, and $25 in 2026. Hospitals with a high mix of Medi-Cal and Medicare patients, as well as rural independent hospitals, will start with a $18 minimum wage in 2024, increasing yearly until reaching $25 in 2033.
The new law also impacts state spending, as it applies to public employees in University of California hospitals and state-run health care facilities. The total cost to the state remains unclear, while a previous version of the bill, that would have instantly instituted a $25 minimum wage, was estimated to cost the state approximately $973.7 million a year.
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