Healthcare Minimum Wage Hike Gets Last-Minute Delay

SACRAMENTO, CA — California healthcare workers who expected a pay raise June 1 will have to wait longer to see it on their paychecks.

Gov. Gavin Newsom on Friday signed Senate Bill 828, a one-month delay to California’s new 25-dollar hourly minimum wage for healthcare workers. Under the new law, the pay increase will take effect July 1 instead of June 1 as originally planned.

SB 828, authored by California state Sen. María Elena Durazo, D-Los Angeles, is a one-month delay of the increase enacted in 2023 by Senate Bill 525.

"This aligns Senate Bill 525 with the budget year and allows the Legislature to continue discussions with the Administration and technical changes to ensure health care workers get their raises," Durazo said.

"SB 525 provided a historic wage increase to more than 450,000 health care workers mainly women and people of color, who take care of us and keep our health care system functioning," Durazo said. "It is clear that these workers need this to help support their families and I appreciate health care employers that recognized this and have begun to increase wages."

SB 828 states: "Even before the COVID-19 pandemic, California was facing an urgent and immediate shortage of healthcare workers, adversely impacting the health and well-being of Californians, especially economically disadvantaged Californians. The pandemic has worsened these shortages. Higher wages are needed to attract and retain healthcare workers to treat patients, including being prepared to provide necessary care in an emergency."

The state's minimum wage for healthcare workers will not immediately be set at $25. Rather, it will be phased in by a multi-tiered statewide minimum wage increase schedule — detailed below — reaching up to $25 an hour for healthcare workers.

For any covered healthcare facility employer with 10,000 or more full-time equivalent employees, any covered healthcare facility employer that is a part of an integrated healthcare delivery system or healthcare system with 10,000 or more full-time equivalent employees, any covered healthcare facility employer that is a dialysis clinic or that is a person that owns, controls, or operates a dialysis clinic, or a covered health facility owned, affiliated, or operated by a county with a population of more than 5,000,000 as of Jan. 1, 2023, the minimum wage for all covered health care employees shall be as follows:

• From July 1, 2024, to June 30, 2025, $23 per hour.
• From July 1, 2025, to June 30, 2026, $24 per hour.
• From July 1, 2026, and until adjusted, $25 per hour.

For any hospital that is a hospital with a high governmental payor mix, an independent hospital with an elevated governmental payor mix, a rural independent covered health care facility, or a covered health care facility that is owned, affiliated, or operated by a county with a population of less than 250,000 as of Jan. 1, 2023, the minimum wage for all covered health care employees shall be as follows:

• From July 1, 2024, to June 30, 2033, $18 per hour, with 3.5 percent increases annually.
• From July 1, 2033, and until adjusted $25 per hour.

For any clinic, community clinic, rural health clinic or urgent care clinic, the minimum wage for all covered health care employees shall be:

• From July 1, 2024, to June 30, 2026, $21 per hour.
• From July 1, 2026, to June 30, 2027, $22 per hour.
• From July 1, 2027, and until adjusted $25 per hour.

For all other covered healthcare facility employers, the minimum wage for all covered healthcare employees shall be as follows:

• From July 1, 2024, to June 30, 2026, $21 per hour.
• From July 1, 2026, to June 30, 2028, $23 per hour.
• From July 1, 2028, and until adjusted $25 per hour.

According to a UC Berkeley Labor Center report, "California health care minimum wage: New estimates for impacts on workers, patients, and the state budget," upon implementation of the healthcare worker minimum wage increase, nearly half a million healthcare workers in California will enjoy higher pay with an average annual earnings increase of $6,400 in the first year.

Additionally, they note that studies show the majority of workers who will benefit from this increase are women and workers of color. Furthermore, half of the lowest-paid healthcare workers rely on state safety net programs such as Medi-Cal, CalFresh and CalWORKS, so raising their wages will lead to lower enrollment in Medi-Cal.