SACRAMENTO, Calif. (CN) — Qualifying California health care workers will see their wages rise to $25 an hour after California Governor Gavin Newsom signed Senate Bill 525 into law late Friday.
The bill — written by Senator Maria Elena Durazo, a Los Angeles Democrat — implements a tiered wage system that rolls out over the next several years. The rate of increase for qualifying workers depends on categories like an employer’s size, location and where they get their funding.
“Thank you, Governor Newsom, for signing SB 525, a historic investment in our healthcare workforce,” Durazo posted on the X platform, Friday night. “SB 525 establishes a schedule for healthcare facilities that will bring healthcare workers up to a minimum wage of $25 per hour!”
There are some caveats. State agencies must develop a waiver by March 1 that would allow a covered health care facility to apply for a temporary pause or different implementation schedule, if they can show the raises would cast doubt on continued business operations.
The law also creates a 10-year moratorium, lasting until Jan. 1, 2034, on any ordinance or rule that would affect wages or compensation for covered health care workers.
“Without SB 525, we know that dozens more hospitals will be thrown into deeper peril as $25 per hour ballot initiatives are likely to pass in cities throughout California and, in addition to a single big jump in wages, would prohibit hospitals from reducing the number of workers or any other personnel action to address higher wage costs,” the California Hospital Association wrote in a statement on Thursday.
Qualifying health care workers will see their wages rise to a minimum of $23 an hour from June 1, 2024, to May 31, 2025; $24 an hour from June 1, 2025, to May 31, 2026; and $25 an hour from June 1, 2026, if they fall into specific employment categories. Those include working for a covered health care facility with over 10,000 full-time employees, a county health care system with over 10,000 employees, a dialysis clinic or a covered health care facility owned, affiliated or operated by a county with a population of over 5 million people.
Primary care clinics, community clinics, rural health clinics and urgent clinics owned and operated by primary care clinics will see a different implementation schedule for their workers. From June 1, 2024, to May 31, 2026, their minimum wage will be $21. It’ll be $22 an hour from June 1, 2026, to May 31, 2027, and $25 an hour from June 1, 2027.
Hospitals that receive a vast majority of their funding from Medi-Cal and Medicare, among other institutions, will have a minimum wage of $18 an hour from June 1, 2024, to May 31, 2033, with 3.5% annual increases. The $25 minimum will become effective June 1, 2033.
Employers affected include facilities that are part of an integrated health care delivery system; licensed acute care hospitals and licensed acute psychiatric hospitals; and a patient’s home, when health care services are delivered by a general acute care or psychiatric hospital.
Employers do not include hospitals owned by the Department of State Hospitals or tribal clinics or outpatient settings.
Covered health care employees include not only nurses, physicians, medical residents and interns, but also janitors, housekeeping staff, groundskeepers, gift shop staff and billing personnel. Excluded are outside salespeople and those who transport people for medical services, as long as they’re not employees of a covered health facility.
The bill passed the Senate and Assembly late Sept. 14, the final day of the Legislature this year. Newsom has until Saturday, Oct. 14, to sign — or veto — bills. In a Friday statement, the governor's office said Newsom's desk is now clear of bills.
Assembly member Matt Haney, a San Francisco Democrat, urged passage of SB 525 late Sept. 14, saying labor and employment groups had reached an agreement on it.
“This bill has realistic timelines,” Haney said.
Assembly member Megan Dahle, a Bieber Republican, railed against the bill that night. She said it would threaten people’s access to health care.
“The deal has been made, leaving our rural counties high and dry,” Dahle said. She added moments later: “This will, without a doubt, break rural health care systems.”
Jim Wood, a Healdsburg Democrat and dentist, said he initially thought SB 525 couldn’t work in his district’s communities. Work done to the bill as it moved through the legislative process impressed him.
“This is not a one-size-fits-all,” he said. “But I will be watching closely.”
The staff writer for this report is a former employee of the California Hospital Association.
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