RCRC, along with local government partners CSAC, UCC, and health care providers, opposes Senate Bill 525, authored by Senator Durazo (D-Los Angeles). SB 525 proposes to raise the health care minimum wage broadly across the health sector to $25 per hour, including for employees working in county agencies – specifically, county health departments, county mental health departments, county correctional health settings, county hospitals, and county owned and operated clinics. Additionally, SB 525 requires salaried employees to be paid twice the proposed $25/hour minimum wage – creating a new salary base of $104,000 per year.

This measure also broadly applies the wage requirements to contractors within these facilities. Counties are estimating that the cost to implement the bill statewide across all 58 counties to be in excess of several hundreds of millions of dollars annually. When wage compression and compaction issues are factored in, the cost estimates increase exponentially.

If the minimum wage for covered health care employment and work performed on the premises of a covered health care setting is raised to $25/hour, there would be compression and compaction issues, causing a major impact to counties who would have to also increase the wages for workers in other departments and for supervisorial employees. This creates significant downstream pressures on county budgets.

To address the wage compression and compaction issues, counties will likely need to evaluate compensation across the entire organization and reopen collective bargaining agreements creating new unfunded administration processes to implement SB 525. Wage increases across a bargaining unit, as a result of SB 525, would far exceed the increases for just the employees in health care setting proposed in this measure.

Given that SB 525 includes an inflator of the greater of 3.5 percent or inflation, it is unlikely that existing revenue sources available to counties will grow sufficiently to cover the wage requirements in SB 525. Additionally, SB 525 would require implementation to begin next year – with no phase in over time – raising wages by $9.50/hour from the current minimum wage of $15.50/hour. With the uncertain state of the economy and anticipated state budget deficit, SB 525 will dramatically and significantly affect county budgets at precisely the time when they are least able to afford it.

RCRC member counties are asked to assist these efforts with the following actions:

  • Evaluate the cost of implementing SB 525 for your county, and submit the fiscal data to RCRC Policy Advocate, Sarah Dukett.
  • Submit a letter of opposition to SB 525.
  • Call your respective State Senator.

RCRC’s letter of opposition is available here. This measure passed out of Senate Labor, Public Employment, and Retirement. SB 525 will next be heard in the Senate Committee on Appropriations. For more information, please contact RCRC Policy Advocate, Sarah Dukett.