Since the start of the COVID-19 pandemic, many cities throughout California have enacted “hazard pay” or “hero pay” ordinances across a variety of industries with the healthcare industry as a focal point. 

On July 7, 2022 Los Angeles Mayor Eric Garcetti signed the “Healthcare Workers Minimum Wage Ordinance” (“Ordinance”) which, effective August 13, 2022, increases minimum wages for non-supervisory/managerial employees of privately-owned healthcare facilities within the City of Los Angeles. The stated purpose of the Ordinance is to “fairly compensate[] [healthcare workers] for keeping us safe while facing risks to themselves and their families.” The bill recites that between 2019 and 2020 job vacancies for various types of nursing personnel increased by up to 30%, and that nearly 30% of healthcare workers are considering leaving the profession altogether (based on a 2021 survey by the Washington Post-Kaiser Family Foundation). The authors claim that an increase in the minimum wage to $25.00 per hour will help alleviate some of these concerns. The Ordinance will go into effect on August 13, 2022 and provides for further annual increases to the minimum wage based on the annual increase in the cost of living (as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers) beginning on January 1, 2024.

The Ordinance only applies to privately owned facilities within the boundaries of the City of Los Angeles including:

1. Licensed general acute care hospitals as defined in Section 1250(a) of the California Health and Safety Code.
2. Clinics under Section 1206(d) of the California Health and Safety Code. This includes clinics conducted, operated, or maintained as an outpatient department of a general acute care hospital or acute psychiatric hospital.
3. A licensed acute psychiatric hospital as defined in Section 1250(b) of the California Health and Safety Code, including an acute psychiatric hospital that is a distinct part of another health facility.
4. A licensed skilled nursing facility, as defined in Section 1250(c) of the California Health and Safety Code, that is a distinct part of a general acute care hospital or acute psychiatric hospital.
5. A licensed residential care facility for the elderly under Section 1569.2 of the California Health and Safety Code, located or licensed at the same address as an acute psychiatric hospital or located on the same campus or parcel of real property as an acute psychiatric hospital.
6. A licensed chronic dialysis clinic as described in Section 1204(b)(2) of the California Health and Safety Code.
7. All facilities that are part of an Integrated Healthcare Delivery System.

The definition of healthcare workers covered by the bill includes: “clinician, professional, non-professional, nurse, certified nursing assistant, aide, technician, maintenance worker, janitorial or housekeeping staff person, groundskeeper, guard, food service worker, laundry worker, pharmacist, nonmanagerial administrative worker and business office clerical worker.” However, supervisors and managers are not included.

The Ordinance explicitly prohibits retaliation and provides that “taking any adverse action against a healthcare worker within 90 days of the worker’s exercise of rights protected under this article shall raise a rebuttable presumption of having done so in retaliation for the exercise of such rights.” Moreover, the Ordinance prohibits employers from funding the minimum wage increase by:

1. Reducing the workers’ premium pay rates or shift differentials;
2. Reducing vacation or other non-wage benefits;
3. Reducing the workers’ hours of work;
4. Laying off healthcare workers; or
5. Increasing charges to any healthcare worker for parking, work-related materials or equipment.  

Therefore, any staff reductions following the implementation of the Ordinance will likely be followed by litigation.

Los Angeles City private healthcare employers covered by this ordinance should review pay practices to ensure compliance effective August 13, 2022. Healthcare facility employers can seek a short waiver if they can demonstrate by “substantial evidence that compliance with this article would raise substantial doubt about the Employer’s ability to continue as a going concern under generally accepted accounting standards”. Thus, any healthcare employer within the City of Los Angeles should consult the Employer’s healthcare counsel, such as CDF’s healthcare practice attorneys, for further guidance.  

Our healthcare practice attorneys at CDF Labor Law LLP will continue to post regarding any pertinent developments.