Health
Update: California’s new health care minimum wage is changing. Here are answers to your questions
In summary
Hundreds of thousands of California health care workers expect to get a raise under a new law that sets a higher minimum wage for them. The law has a number of variables, including when it will actually take effect.
This story was updated to include new information about when California’s health care minimum wage will take effect.
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It’s no surprise that California health care workers have questions about a new state law that will give them a higher minimum wage. It has different pay scales based on where they work and who they work for.
And, Gov. Gavin Newsom has turned its start date into a moving target, confusing both workers and employers.
Last fall, Newsom signed a law that phases in pay increases for the state’s lowest-paid health workers to $25 an hour. The labor union SEIU California advocated for Senate Bill 525, lifting the pay floor for hundreds of thousands of workers.
Originally, the law mandated that employers begin raising wages by June 1. Newsom then delayed that deadline to July 1. Now, a new budget deal reached by the administration and Democratic legislators is expected to push back the raises at least until Oct. 15. That’s contingent on the state bringing in at least 3% more revenue than the administration expects in the first quarter of the upcoming fiscal year, or the state collecting data to secure federal funding that will help offset some of the costs related to the law.
If the money doesn’t come through, the law and the wage increases would take effect on Jan. 1.
“As a result of workers’ tireless advocacy, we are confident that the initial raise for workers who have not yet received it will happen in the fall,” Dave Regan, president of SEIU-United Healthcare Workers West, said Saturday in a written statement.
Newsom has sought delays to the law because his administration estimates it will cost $4 billion, of which half would come from the state’s general fund. And, if you’ll recall, the state is facing a projected $28 billion deficit.
Amid the uncertainty, some employers have already raised wages. Others are still waiting to hear the latest guidance from the state. In the months since the law passed, workers and employers have been seeking help to decipher it. They want to know if the new law applies to them, and if so, when they should expect their pay boost.
CalMatters has spoken with SEIU, employers and researchers who have analyzed the law to answer your questions. Below we answer some of the most common ones. If you have a question not answered here, please email Ana B. Ibarra at ana@calmatters.org.
Which wage structure applies to me?
As designed, the minimum wage increase isn’t supposed to come all at once. Workers will reach the $25 hourly pay rate over a number of years, and some sooner than others.
How soon employees reach $25 largely depends on the type of facility they work in and the size of their employer.
For example, workers at the state’s 12 largest health systems — such as Dignity Health, Sutter, Adventist and UC Health — will start their pay increase at $23 an hour.
Employees at rural and independent hospitals will start at $18. Here is where some health settings fall in the wage schedule:
My employer says there will be no minimum wage increase at skilled nursing facilities. Is this true?
It depends. Skilled nursing facilities, or nursing homes, are included if they are part of a large hospital or health system. Stand-alone skilled nursing facilities are exempt for now.
That’s because the law states that stand-alone nursing homes will be included only when the state sets a standard dictating how much of nursing homes’ revenue must be spent on patient care. Assembly Bill 1537 by Assemblymember Jim Wood seeks to set that standard. If that bill becomes law, it would close this loophole and compel stand-alone skilled nursing facilities to raise their wages to $21 an hour and eventually to $25 by 2028.
What types of workers qualify for a raise?
Approximately 426,000 workers are expected to benefit from the law, according to the latest estimates from the UC Berkeley Labor Center. This includes medical assistants, front office staff, medical billing personnel, patient techs, janitors, food service workers, among others.
The law also applies to contracted workers who work primarily on-site at an eligible facility.
I was told the law only applies to workers in unionized health care institutions. Is this true?
No. The law applies to all low-wage health workers who are employed by a facility that is subject to the law, regardless if they are unionized or not.
Can employers opt out of this law?
Certain health facilities, primarily clinics, will be allowed to apply for a temporary pause from the wage requirements if they can demonstrate that the mandated raises would result in financial strain that could lead to cut in services, job losses or closure of the facility. The California Department of Industrial Relations is tasked with developing this waiver program.
So when can I expect my raise?
Under the budget deal announced on June 22, workers who have not yet received their pay raise can expect it by mid-October as long as the state’s fiscal situation improves or if the state is able to secure federal funding. This deal still has to be approved by the Legislature next week.
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.
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Susan, Palos Verdes
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Ana B. Ibarra covers health care for CalMatters. Her reporting largely focuses on issues around access to care and affordability. She joined CalMatters in 2020 after four years at Kaiser Health News. She… More by Ana B. Ibarra
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