Sometime in the coming week, the state Senate could be voting on legislation — Senate Bill (SB) 525 — that would raise the minimum wage to $25 for all health care workers, beginning Jan. 1, 2024.
An economic analysis of SB 525 found that the measure would result in major costs to the health care industry that will likely be passed along to purchasers of health care services, including private individuals, businesses, and state and local governments. It is estimated that total public and private health care expenses for labor will increase by about $8 billion beginning in 2024, consisting of the following components:
- $4.9 billion related to wage increases for workers currently making between $15.50 (the statewide minimum wage) and $25 per hour
- $920 million related to increased employer payments for benefits such as social security contributions, retirement, and overtime differentials
- $300 million due to provisions raising the “manager exemption” of California’s overtime requirements from $31 per hour to $50 per hour ($104,000 annually)
- $380 million for the increase in minimum wages paid to on-site contractors, such as those providing building and grounds maintenance, security services, and temporary employment services
- $1.5 billion due to employers being forced to raise pay rates for employees earning more than $25/hour to address “wage compression”
At a time when hospitals are already confronting inflation, workforce shortages, and structurally low reimbursement rates for Medi-Cal and Medicare, this could have devastating consequences for patient care and access, and senators need to know this.
Recently, CHA issued an alert, asking members to call or text their state senator — by May 26 — to ask them to oppose this legislation. Senators need to know how this bill would jeopardize hospitals’ ability to continue to deliver care and negatively affect the community they serve.
SB 525 isn’t the only important piece of legislation being considered at the Capitol. CHA continues to advocate a number of bills that would be impactful for your hospitals, including ambulance patient offload times, nurse staffing ratios, seismic compliance, and community college slots for incumbent health care workers, just to name a few. And, as the Legislature moves toward meeting the June 15 deadline to pass a balanced state budget, CHA continues to advocate with legislative leadership and members of the Assembly and Senate budget committees for one-time financial relief for hospitals.
Monday is Memorial Day, and while for many it marks the unofficial start of summer, it’s important to remember what the holiday is really about: honoring those who have made the ultimate sacrifice. From all of us at Hospital Council, grateful thanks to all the men and women who died while serving our country in the fight for the freedom and honor of the nation. And to our Veterans Administration hospitals, thank you for leading the charge every day to ensure that those who have served our country receive safe, quality, and compassionate care.