LA ordinance raises private healthcare workers' minimum wage to $25 per hour

Photo: Cavan Images/Getty Images

Los Angeles Mayor Eric Garcetti signed an ordinance into law which raises the minimum wage for healthcare workers to $25 per hour at eligible private healthcare facilities. 

The signing of the ordinance, which occurred July 8 and which was announced via a press release and through Mayor Garcetti's Twitter account, will impact roughly 20,000 healthcare workers, according to the Mayor's office. 

It follows a unanimous vote by the Los Angeles City Council on June 29 to raise the minimum wage for healthcare workers.

The city had received an initiative petition earlier this year aimed at boosting the minimum pay rate for healthcare workers at private facilities, which had amassed 145,574 signatures.

The ordinance covers institutions including hospitals, doctor groups, affiliated clinics and nursing facilities, and will take effect 31 days after the City Clerk publishes the ordinance.

The release stated the wage rate would be adjusted annually for the cost of living starting on January 1, 2024.

WHAT'S THE IMPACT

The ordinance noted hospitals, health systems and clinics are facing staffing shortages that could jeopardize the availability of care in Los Angeles, especially in the area's most vulnerable communities.

The healthcare industry is also competing with other economic sectors to fill non-clinical roles, including cleaning staff, food service workers, and IT admins. 

Meanwhile, hospitals are paying high turnover costs due to RNs leaving the profession. Hospital turnover increased by 1.7% during the past year and currently stands at 19.5%, according to the 2021 NSI National Health Care Retention & RN Staffing Report.

"Given the ongoing conditions in the healthcare industry, this rational policy should be applied to healthcare workers," the ordinance stated. "Adequate compensation will help address burnout, retention challenges, and worker shortages affecting healthcare workers in Los Angeles."

THE LARGER TREND

Late last year, Advocate Aurora Health, among the largest employers in Illinois and Wisconsin, announced it would raise its minimum wage to $18 an hour.

The 10,800 team members directly affected by the wage hike include those in food service and environmental services positions.

The pandemic has taken its toll on the mental and emotional wellbeing of physicians, leading to high stress and burnout rates. 

Primary care physician turnover leads to almost $980 million in excess healthcare costs, with physician burnout especially costly to public and private payers, who bear most of these excess healthcare costs.

All of this is happening as clinical labor costs are rising by an average of 8% per patient day, translating to $17 million in additional annual labor expenses, according to an October 2021 PINC AI report from Premier.

ON THE RECORD

"The past few years have taken an unimaginable toll on our healthcare workers -- often putting themselves at risk to care for the sick and their families," Mayor Garcetti said in an official statement. "It is time we put them first. Our healthcare heroes deserve fair compensation for their critical work, countless sacrifices and incredible service to our city and its people."