California LA Downey Long Beach Health Care Minimum Wage

As we reported, the Los Angeles City Council passed a new minimum wage ordinance for healthcare workers, raising the minimum wage for healthcare workers at private healthcare facilities in Los Angeles to $25.00 an hour. Similarly, the Downey City Council passed its own citywide minimum wage ordinance for health care workers. For now, however, both ordinances are on hold. The Los Angeles ordinance would have gone into effect on August 13, 2022, and the Downey ordinance would have gone into effect on August 11, 2022.

On August 10, 2022, two separate referendum petitions were filed in the City of Los Angeles and the City of Downey, respectively. Supported by the group No to Unequal Wage Measures, the petitions seek to suspend the ordinances and have the issue decided by voters in their respective cities. Petitioners claimed they gathered double the signatures needed to suspend minimum wage ordinances to hold a public vote on new minimum wage hikes.

As a result, minimum wage increases are frozen while the respective city offices verify that the petitions contain the required number of valid signatures, which is 40,717 in Los Angeles. Assuming the required number of signatures is verified, the issue will be put to a public vote. In Los Angeles, however, if it is determined that there are not enough signatures as required, the ordinance will take effect when the city clerk issues a certificate of insufficiency. In Downey, the ordinance has been automatically suspended pending review of the petition, and the Downey City Council will issue a decision after that process is complete.

If an election were allowed, it would likely not take place until 2024. Although it is too late to include referendums in this year’s autumn elections, the No to Unequal Pay Measures campaign claimed that pushing for an election specials in 2023 would be too expensive.

Currently, private sector health care employers (as defined in the ordinances) in Los Angeles and Downey will likely not be required to implement minimum wage increases for their employees, pending review and certification . This should give healthcare employers much more time to plan and, if desired, aggressively campaign against the ordinances.

However, two other California cities, Monterey Park and Long Beach, approved a $25.00 hourly minimum wage for private sector healthcare workers in early August. In Monterey Park, the ordinance will go into effect 30 days after the city attorney processes the ordinance. In Long Beach, the Long Beach City Council voted unanimously in favor of an ordinance that would increase the minimum wage for health care workers on August 2, 2022. The first reading of the ordinance by the City Council went be August 9, 2022 and the second reading took place on August 16, 2022. The Long Beach City Council approved the ordinance on August 16, 2022 and, if no petition for similar citizen referendum, the ordinance will take effect on September 16, 2022.

These ordinances are part of a concerted effort by the Service Employees International Union (SEIU). SEIU is currently pushing to pass or put similar ordinances on the ballot across California, including in Anaheim, Baldwin Park, Culver City, Duarte, Inglewood and Lynwood.

What should employers do now?

The impact of such a dramatic change in minimum wages would obviously not only affect employers’ finances and financial viability, but also wage compression issues (as lower wage classifications encroach on the wages of higher-paid employees qualified or with more qualifications). Accordingly, going forward, private sector healthcare employers should proactively consider taking the following actions to mitigate the impact of these ordinances:

  • Freeze hiring for vacancies as they occur in lower paying positions that make less than $25.00 per hour.
  • Revise and (re)map job classifications to include lower paying jobs in higher paying job classifications.
  • Relocate and/or expand in the future to other local jurisdictions where local elected officials have not shown a propensity to pass such specific regulations.
  • Discuss and implement automation strategies for certain operations (eg adding vending machines).

©2022 Epstein Becker & Green, PC All rights reserved.National Law Review, Volume XII, Number 232

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