California Health Workers May Face Rude Awakening With $25 Minimum Wage Law

Nearly a half-million health workers who stand to benefit from California’s nation-leading $25 minimum wage law could be in for a rude awakening if hospitals and other health care providers follow through on potential cuts to hours and benefits.

A medical industry challenge to a new minimum wage ordinance in one Southern California city suggests layoffs and reductions in hours and benefits, including cuts to premium pay and vacation time, could be one result of a state law set to begin phasing in in June. However, some experts are skeptical of that possibility.

The California Hospital Association brought a partly successful legal challenge to Inglewood’s $25 minimum wage ordinance, which barred employers from taking those sorts of steps to offset their higher costs.

“Layoffs, reductions in premium pay rates, reductions in non-wage benefits, reductions in hours, and increased charges are consequences of an employer having less money to spend—which will necessarily be the case given the significant increase in spending on wages due to the minimum wage,” the association said in its lawsuit. Additional examples include reducing health coverage and charging for parking or work-related equipment.


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