California could raise health care workers’ minimum wage to $25 an hour

Health care workers in California may be getting a raise after the state legislature approved a measure to raise their minimum wage to $25 per hour that is now on Gov. Gavin Newsom’s desk.

Under the bill, the minimum wage hike to $25 an hour would cover all employees of health care facilities, including cleaning and maintenance staff, food service workers, gift shop workers, medical coders and nursing assistants – although not all would see an immediate raise.

Large health care facilities with more than 10,000 full-time workers and dialysis clinics would raise their minimum wage to $23 an hour starting in 2024, followed by hikes to $24 in 2025 and $25 in 2026. The minimum wage hikes would be phased in more slowly at small health care facilities; the minimum wage at urgent care clinics would increase to $25 an hour by 2027 while skilled nursing facilities and other health care facilities wouldn’t reach $25 an hour until 2028.

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The minimum wage requirement would be phased in even more slowly at rural hospitals and facilities that serve higher rates of patients enrolled in Medicare and Medi-Cal, California’s Medicaid program, where the wage floor would rise to $18 an hour in 2024 and would gradually rise to $25 in 2033.

The bill also includes a provision that requires the state to establish a waiver program by next year to allow health care facilities that are in financial distress to temporarily delay the minimum wage increases. It would also block local ordinances to impose higher minimum wage increases for 10 years until 2034.

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Lawmakers approved the bill, known as SB 525, on Thursday night in the final hours of California’s legislative session. The Assembly voted 59-11 to approve the bill while the Senate followed suit with a 31-9 vote, which generally went along party lines with Republican legislators opposed. The passage of SB 525 now gives Newsom 30 days to sign it into law or veto the measure.

Newsom has warned that he may veto some of the bills approved by the Democrat-controlled legislature due to the state’s budget deficit, which is projected to exceed $31 billion.

A previous version of the bill was estimated to cost California more than $973 million per year to cover the cost of raises at state-owned health care facilities. That figure excluded what was deemed a “definitely significant” but undetermined amount to comply with wage parity requirements for non-health care workers at University of California system facilities.

The cost of the bill’s amended version that cleared both chambers of the legislature on Thursday is still being calculated, but it is expected to be lower than the initial estimate, given the revisions that were made after agreements between SEIU California, which backed the measure, and health care industry groups that represented hospitals and clinics.