California state lawmakers agreed to gradually increase the minimum hourly wage for healthcare workers to up to $25. And what is missing now so that it can be applied from 2024?
This plan, approved by the state legislature on Thursday, September 14, provides for gradual wage increases in hospitals, nursing homes and other providers of medical and psychiatric services.
The University of California-Berkeley Labor Center estimates the increase would boost wages for more than 469,000 health care workers. The center estimates that this would primarily benefit workers of color, who make up 70% of those employees, and women, who make up about three-quarters.
The increase is estimated to help 40% of health care workers in California, who would earn an average of $10,352 more per year.
What will the minimum wage be for the healthcare sector in California?
After much back and forth, unions and health care employers finally agreed to offer workers a minimum wage of $25 an hour. The measure also offers an incentive for their employers: a 10-year moratorium on local actions aimed at increasing pay for medical workers.
The bill also requires all employees exempt from overtime pay to have a monthly income of at least 150% of the minimum wage for health care workers, or $78,000 per year.
What is missing to apply the health care minimum wage increase in California?
Following an agreement between unions and health care employers, the measure was approved by state lawmakers on Thursday, Sept. 14, the last day of the 2023 legislative session. The bill is awaiting signature by California Governor Gavin Newsom, a Democrat.
The agency will evaluate the bill before Oct. 14, the deadline for implementing the law, said spokesman Izzy Gordon. The measure, if approved, would be applied gradually starting in June 2024 until it reaches $25 an hour; in some cases it could take ten years to reach the goal.
State Sen. María Elena Durazo, the Los Angeles Democrat who introduced the bill, called it “the country’s first historic investment in our health care workforce.” The measure “is a fundamental step to ensure that we address staffing shortages,” he said before the bill received final approval in the Senate late Thursday the 14th.
To which health workers does the wage increase apply?
According to the health workforce standard promoted by Los Angeles Democratic Senator María Elena Durazo, the measure applies to those who provide medical care and to those who support the provision of medical care in:
- Intensive care hospitals
- Psychiatric hospitals
- Medical advisors
- Mental Health Centers
- Nursing homes
The bill, SB 525, specifically states that the measure affects workers who work in the professions of nurse, doctor, orderly, assistant physician, intern or associate, nursing technician, janitor, cleaner, gardener, security guard, administrative employee or non-managerial administrative employee, employee Food service workers, gift shop workers, technical and support staff, medical coding and billing staff, computer programmers, call center and warehouse staff, and laundry staff, regardless of formal job.
What would the annual wage increase be?
According to the SB 525 proposal, application of the gradual increase would begin in June 2024, but the amounts depend on where they work. Rural hospital employees, for example, would have to wait ten years to reach the $25 hourly rate.
Next, the salary increase would be applied as follows:
- Dialysis clinics and large health systems with more than 10,000 employees would pay a minimum wage of $23 per hour starting June 1, 2024. The payment would rise to $24 in 2025; already 25 dollars in 2026.
- Community clinics would begin the wage increase at $21 an hour beginning June 1, 2024, increasing to $22 in 2026; and $25 on June 1, 2027.
- Hospitals with high proportions of Medi-Cal and Medicare patients, as well as independent rural hospitals, would be required to pay their employees $18 per hour starting June 1, 2024. This rate would increase by 3.5% annually until it reaches $25 in 2033.
- Other health care employers would increase their minimum wage to $21 an hour in 2024; to $23 in 2026; by 2028 already 25 US dollars.