California Debates Higher Minimum Wage for Health Workers

California may become the first state to establish a $25 per hour minimum wage for health care workers under legislation that is advancing in the state Senate.

SB 525, introduced in February by state Senator Durazo (D-Los Angeles) would apply to a broad range of low-wage home care workers, potentially including those workers that don’t participate in direct patient care, such as office workers. The bill is backed by the powerful SEIU-United Healthcare Workers West, who reportedly have dumped nearly $11 million into a series of California minimum wage measures.

The bill is facing opposition from hospital groups and various health-related associations, arguing that a minimum wage of this level would increase costs to unsustainable levels, resulting in businesses closing and less access to care.

On April 12, the Committee on Labor, Public Employment and Retirement heard from the bill’s sponsor as well as numerous community members, both in favor and opposed. Senator Durazo reported that California faced a health care worker shortage of over 500,000 prior to the pandemic, citing a recent report (not identified) that shows 31% of workers saying they are considering leaving the industry for better paying jobs in other fields. Speaking in opposition, an administrator of a large hospital system stated they would see an annual decrease in revenue of $60-$80 million if this measure passes.

Following public comment, state Senator Laird (D-Santa Cruz) mentioned some health care systems that operate on razon-thin margins, depending on where in the state they’re located. He expressed a need for an amendment bill that addresses this.

As there were no additional questions, the Committee called the roll. With three yes votes, the bill remains on call to allow those absent a chance to vote. Stay tuned to future Private Duty Source newsletters for updates.