California’s home health workers are set to receive higher pay next year as a result of a minimum wage hike approved by the state legislature.
In an effort to bolster workforce stability and tackle the health care personnel shortage in California, Gov. Gavin Newsom approved a bill this month that will raise the minimum wage for health care professionals.
Specifically, the bill requires certain health care facilities in the state to raise the hourly minimum wage for covered health care workers — including support staff members like janitors and groundskeepers.
The bill also mandates that those facilities must guarantee salaried employees receive a monthly salary, which should be “at least 150% of the health care worker minimum wage or 200% of the relevant minimum wage,” whichever amount is higher.
California already has the highest average salary for RNs in the country. According to the latest Home Care Salary & Benefits report from the Hospital & Healthcare Compensation Service, the average annual salary for RNs in California is $58.85 per hour.
The news will be greeted warmly by caregivers in the Golden State. However, experts in the home-based care space have worried before that the wage increase could have adverse effects on providers.
“It certainly seems like it’s set up backward,” Angelo Spinola, the home health, home care, and hospice chair at the law firm Polsinelli, told Home Health Care News in July. “What should be happening with our health care system is we should be looking at what reimbursements rates are, looking at the amount of money coming in, what overhead costs are and determining from there what wages should be paid.”
The legislation was signed despite early objections from providers, hospitals and a large nurses union in California.
One of the big concessions made was a tiered increase, which ends in 2025.
“Gov. Newsom’s signature on landmark legislation to improve wages for California’s health care workers will create meaningful change for families struggling to keep pace while at the same time protecting access to care in vulnerable communities,” Carmela Coyle, president and CEO of the California Hospital Association, said in a statement. “This bill strikes the right balance between significantly improving wages while protecting jobs and safeguarding care at community hospitals throughout the state.”
According to a cost analysis from the UC Berkeley Labor Center — once the hourly wage reaches $25 in 2025 — the legislation will result in over $10,000 per year in increased wages for approximately 450,000 low-wage health care workers in California.
In that same analysis, researchers speculated that state costs that come with wage hikes would be offset by a reduced reliance on the public safety net by health workers and their families.
“Almost half — 48.8% — of families with a health care worker affected by the proposed minimum wage increase are enrolled in public safety net programs,” the report’s authors wrote. “That includes Medi-Cal, CalFresh, CalWORKS and the Federal Earned Income Tax Credit. Raising the health care minimum wage would help reduce these working families’ need to rely on public safety net programs, in turn reducing state Medi-Cal spending as affected workers become eligible for federally-subsidized insurance through Covered California.”