A $25 minimum wage is in sight for California health care workers under new legislative deal

Tens of thousands of California health care workers stand to see their minimum wage climb to $25 an hour over the next several years in an amended legislative proposal that has support from both labor groups and employers. 

The new deal gives workers the assurance of rising wages while offering an incentive to their employers: A 10-year moratorium on local measures that aim to increase compensation for medical workers. 

That’s valuable to hospitals and other medical employers after voters in Inglewood last year passed a measure setting a $25 minimum wage for health care workers in the city. 

The terms are laid out in Senate Bill 525, a measure by Democratic Sen. Maria Elena Durazo of Los Angeles, which was amended Monday afternoon to reflect four different schedules that would eventually set a $25 minimum across the health care industry.

The deal came together late in the legislative session. It must pass the Legislature this week to reach Gov. Gavin Newsom and become law.  

“As amended today, SB 525 strikes the right balance between significantly improving wages while protecting jobs and safeguarding care at community hospitals throughout the state, ” said Carmela Coyle, president of the California Hospital Association.

“The agreement also ensures that wages for health care workers are set by the state, creating greater equity for all of California’s health care workforce,” Coyle added.

Some of California’s lowest paid health workers include nursing assistants, patient aides, medical technicians and janitorial workers. 

Schedule for minimum wage increases

How soon these employees may see that $25 hourly wage floor depends on where they work. Employees at rural hospitals, for example, would have to wait 10 years until they reach the $25 hourly rate. 

According to the updated bill language, the boost in pay would roll out in the following ways:

• 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.
• 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. 
• 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. 

“Everyone in the health care sector understands that we have a workforce crisis, and that wages are the essential prerequisite for any solution,” Tia Orr, executive director of SEIU California, the sponsor of the bill, said in a statement.  “The question has never been whether wages need to increase, but how.”

Local measures on health care pay

A wage floor of $25 an hour comes out to just under $50,000 a year. SEIU California has argued that pay is the minimum to retain these workers, many of whom work multiple jobs to make ends meet. 

Durazo’s bill originally called for the wage hike to go into effect across the industry on Jan. 1, 2024 and be adjusted annually for inflation. California’s minimum wage is currently $15.50, although it’s higher in some cities and counties.

Negotiations between the health care industry and SEIU have been unfolding over years, with some proposals reaching voters. 

SEIU-UHW, an affiliate of the union,  a year ago tried negotiating a $25 minimum wage for hospital workers. In exchange the union would support hospitals in their request to delay state-mandated seismic standards due in 2030. Those negotiations fizzled. 

As many voters will remember, SEIU has gone head to head with the dialysis industry on the statewide ballot three times in five years — losing every time. 

And last year, the union pushed for city ordinances that would have raised the minimum wage at local private health facilities. That attempt resulted in one win for the union— voters in the city of Inglewood agreed that health workers there, most notably at Centinela Hospital, should be paid a minimum hourly rate of $25. That measure went into effect at the start of this year. 

A health worker wage hike is expected to benefit an estimated 469,000 employees, including people who make slightly more than $25 but who would likely get a corresponding pay increase, according to an analysis by UC Berkeley’s Labor Center. 

Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.