California Health Payroll, LA, Downey, Long Beach

As we reported, the Los Angeles City Council approved a new minimum wage ordinance for health care workers, increasing the minimum wage for health care workers at private health care facilities in Los Angeles to $25.00 an hour. Likewise, the Downey City Council approved 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 with the City of Los Angeles and the City of Downey, respectively. Backed by the group No to Inequitable Pay Measures, the petitions seek to keep the ordinances in place and have the issue decided by voters in their respective cities. The petitioners said they have collected twice the signatures needed to suspend the minimum wage ordinances in order to hold a public vote on the new minimum wage increases.

Accordingly, minimum wage increases are being frozen while the appropriate city clerk’s offices verify that the petitions contain the required number of valid signatures, which is 40,717 in Los Angeles. If the required number of signatures is verified, the matter will be put to a public vote. In Los Angeles, however, if it is found that there are not enough signatures as required, the ordinance will go into effect after the city clerk issues a certificate of insufficiency. In Downey, the ordinance is automatically suspended pending review of the petition, and the Downey City Council will issue a decision once that process is complete.

If the election is allowed, it is unlikely to take place until 2024. Although it is too late to include referendums in this year’s autumn elections, the No to Pay Inequality campaign said that the push for a snap election in 2023. would be too expensive.

Currently, private sector health care employers (as defined in the regulations) in Los Angeles and Downey will likely not be required to apply the minimum wage increases to their employees, pending review and certification. Hopefully, this should give healthcare employers significantly more time to plan and, if they wish, to aggressively campaign against the regulations.

However, two other California cities, Monterey Park and Long Beach, approved a $25.00 an hour minimum wage for private sector health care 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 to support an ordinance to increase the minimum wage for health care workers on August 2, 2022. The first reading of the ordinance by the City Council was on August 9, 2022, and the second reading was held on the 16 August 2022 The Long Beach City Council approved the ordinance on August 16, 2022, and absent a similar citizen referendum petition, the ordinance will take effect on September 16, 2022.

These regulations 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 Lynnwood.

What employers should do now

The impact of such a dramatic change in minimum wages would obviously not only affect the finances and financial viability of employers, but also the problems of wage compression (as lower paying classifications eat into the wages of higher skilled or longer tenured employees ). Accordingly, looking forward, private sector healthcare employers should consider proactively taking the following actions to mitigate the impact of these regulations:

  • Freeze hiring for vacancies as they appear in lower paying positions that make less than $25.00 per hour.
  • Review and (re)map job classifications to include lower paying duties in higher paying job classifications.
  • Future relocation and/or expansion to other local jurisdictions where local elected officials have shown no inclination to adopt such targeted provisions.
  • Discuss and implement automation strategies for specific operations (eg adding vending machines).

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

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