Newsom approves minimum wage for health care workers

SACRAMENTO, Calif. — Gov. Gavin Newsom has signed a closely watched bill that would raise the minimum wage for California health care workers to $25 per hour.

The proposal, Senate Bill 525 from Los Angeles lawmaker María Elena Durazo, will eventually raise hourly wages for health care workers in most settings to $25. Proponents have argued that higher wages are crucial for easing a workforce shortage that worsened during the pandemic as grueling conditions caused many to quit their jobs.

But until Friday, it was unclear to even those close to the deal whether Newsom would sign it. The governor’s office was not directly involved in the health care wage negotiations between hospitals, clinics and unions — unlike with a fast food labor deal that Newsom helped broker — and he routinely cites cost pressures in his veto messages. An analysis of an earlier version of the bill estimated it would cost the state $1 billion annually.

Labor leaders cheered the decision.

“Today California is putting a stop to the hemorrhaging of our care workforce by ensuring health care workers can do the work they love and pay their bills — a huge win for workers and patients seeking care,” Tia Orr, Executive Director of SEIU California said in a statement.

In the final days of this year’s legislative session, hospitals, dialysis centers and community clinics got on board with the raised wage. In exchange, SEIU agreed to stop seeking dialysis industry regulation through the ballot for the next four years, pausing a perennial election fight between the two interests. A provision in the final bill also said a statewide health care worker minimum wage would preempt any local ordinances.

The Assembly’s new speaker, Robert Rivas, supported the minimum wage push, giving it a critical boost after publicly backing the $25 wage early in his tenure.

An analysis from July on an earlier version of the bill estimated it could cost the state over $1 billion per year.

The proposal was a top priority for SEIU, a powerful labor union that’s been trying for years to secure a minimum wage for health care workers over the objections of hospital interests. Last year, a last-minute deal with hospitals fell through. The union also began pursuing a city-by-city approach in Southern California, attempting to pass such wage ordinances through city councils and local initiatives in the Los Angeles and San Diego areas.

The signature caps a mixed legislative season for organized labor. Newsom rejected proposals to limit the use of self-driving trucks and extend unemployment insurance benefits to striking workers, a proposal advanced amid walkouts in Hollywood.