Legislative Solution on Minimum Wage Strikes Right Balance

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Tonight, the state Senate and Assembly are expected to vote on a bill that creates a path toward increases for a health care-specific minimum wage in California. If the votes carry, the governor will have 30 days to take action. 

The particulars of this bill as they relate to hospitals are the product of negotiations authorized by the Board. The outcome of those discussions — challenging and time-limited — strikes a critical balance between supporting workers and protecting jobs and access to care in some of our most vulnerable communities. The agreement reinforces hospitals’ commitment to health care workers, the need to support them and their families with a living wage, and the need to help with their financial security. 

Broadly, for hospitals, the bill provides stability and predictability for the path to $25 per hour for health care workers and to protect access to care through: 

• Preemption of city and county minimum wage ballot initiatives for 10 years. This includes those that are in process (cities where activity is underway); the initiative already enacted in the city of Inglewood will remain in place. The agreement also preempts local executive compensation cap ballot initiatives for six years. 
• Three pathways to a $25 minimum wage, as follows: 
  • For the 12 largest hospital systems in the state — those with more than 10,000 full-time equivalent workers: 
    • $23 in June 2024 
    • $24 in June 2025 
    • $25 in June 2026 
    • Minimum wage after 2026 would be indexed to the lower of inflation or 3.5%  
  • For California’s most vulnerable communities, served by: 1) the 31 hospitals in the state that are not part of a health system and are rural; 2) the 39 hospitals in the state that are not part of a health system and have a government payer mix of 75% or more; and 3) the seven hospitals in the state that are part of a health system where both the hospital and the health system have a government payer mix of 90% or more: 
    • $18 in June 2024 
    • Minimum wage after 2024 would be increased by 3.5% annually until it reaches $25 in June 2033; it would be indexed thereafter to the lower of inflation or 3.5% 
  • For all other hospitals in the state: 
    • $21 in June 2024 
    • $21 in June 2025 
    • $23 in June 2026 
    • $23 in June 2027 
    • $25 in June 2028 
    • Minimum wage after 2028 would be indexed to the lower of inflation or 3.5% 

The agreement also clarifies the contract workers to whom a minimum wage applies: 

• Contractors for whom the hospital has “joint employment” liability — those contractors for whom the hospital determines their wages, hours, and working conditions 
• Contractors who work “primarily” (i.e., 51% of their time) on hospital premises 

Should the bill pass, attention will turn toward the governor’s office, where we will reinforce the historic nature of this legislation as a package that delivers for California’s health care workers while protecting access to care.

Stay tuned for how you can help with these efforts and bring to completion a landmark agreement for California.