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California’s current minimum wage is $15.50 per hour. Some cities in California have established minimum wages that are higher than the current statewide minimum wage. Since the start of 2022, spearheaded by SEIU-United Health Workers, several California cities have passed or introduced ordinances for a $25 per hour minimum wage for healthcare workers. Some of these ordinances have been challenged and put on hold after petitions for referendum were submitted to put the matter before city voters.

This is now all about to change after Governor Newsom signed Senate Bill 525 into law late Friday. This bill incorporates a limited moratorium on such future initiatives, but preserves the recent health care worker $25 minimum wage initiative passed by voters in Inglewood.

Amendments to the new law on September 11 struck the flat minimum wage increase provisions initially proposed when the bill was introduced, and instead implemented a tiered schedule of increases for differing employers based on specified factors. Generally speaking the new law provides:

– – Dialysis clinics and large health systems with more than 10,000 workers would pay a minimum wage of $23 an hour in 2024, $24 in 2025, and $25 in 2026.
– – Community clinics would start the pay increase at $21 per hour in 2024, rising to $22 in 2026 and $25 in 2027.
– – Other health care employers would increase their minimum wage to $21 per hour in 2024, $23 in 2026 and $25 by 2028.
– – Hospitals with a high mix of Medi-Cal and Medicare patients, as well as rural independent hospitals would have to pay workers $18 an hour in 2024. That rate would increase 3.5% annually until it reaches $25 in 2033.

This new law was highly controversial, and there is a long list of organizations who were in favor, or who opposed the law. SEIU California was the sponsor of this law arguing, among other things that “Care work has historically been undervalued by society. A recent report on the California nursing home workforce characteristics found that 1 out of every 2 Skilled Nursing Facility workers earns less than $20 per hour.”

Opponents argued that, “In the aftermath of the COVID-19 pandemic, health care providers in California are in dire financial straits. One major hospital has already closed, others are on the brink, and more than half are losing money every day to care for patients.” They also argue that, “SB 525’s added costs will force health providers to cut hours, positions and services. With fewer positions and potentially fewer providers, health care professionals will have fewer opportunities, be at heightened risk of job loss, and have less flexibility in the positions that are available.”

The California Nurses Association/National Nurses United is opposed unless amended to exempt RNs from the scope of the bill. They argue that, “the inclusion of RNs in this bill will ultimately lower the wage floor for RNs, encouraging employers to propose takeaways on wages during bargaining. California RNs are currently among the highest paid in the nation well above the proposed $25 minimum hourly wage for health care workers in SB 525. According to the U.S. Bureau of Labor Statistics, the median hourly wage for California RNs is $60.26, while RNs in the lower 10th percentile make $37.53. In other words, one would be extremely hard pressed to identify anyone working as an RN in California who makes below $25/hour.”