Los Angeles, Calif. (July 18, 2022) - On July 8, 2022, Los Angeles Mayor Eric Garcetti signed an ordinance approving a raise to the minimum wage for employees of "covered healthcare facilities" in the City of Los Angeles to $25.00 per hour. The ordinance will go into effect on August 7, 2022 and provides for further annual increases to the minimum wage, beginning on January 1, 2024.
Which Facilities Are Affected?
The new law applies to privately-owned healthcare facilities located within the City of Los Angeles and includes the following entities:
- General acute care hospitals;
- Outpatient clinics that are part of a general acute care hospital or acute psychiatric hospital;
- Acute psychiatric hospitals;
- Skilled nursing facilities that are part of general acute care hospitals or acute psychiatric hospitals;
- Residential care facilities for the elderly located at the same address or campus as an acute psychiatric hospital;
- Chronic dialysis clinics; and
- Facilities that are part of an integrated healthcare delivery system. Integrated healthcare delivery systems include one or more hospitals and covered physician groups, healthcare service plans, medical foundation clinics, or other related facilities.
Who is a "Healthcare Worker" Under the Ordinance?
The ordinance covers "Healthcare Workers," defined as employees of covered healthcare facilities, including clinicians, professionals, non-professionals, nurses, certified nursing assistants, aides, technicians, maintenance workers, janitorial or housekeeping staff, groundskeepers, guards, food service workers, laundry workers, pharmacist, nonmanagerial administrative workers, and business office clerical workers. The increase does not apply to managers or supervisors.
Employers subject to this new increase are prevented from funding this increase by:
- Reducing premium pay rates or shift differentials;
- Reducing vacation, healthcare, or non-wage benefits;
- Reducing hours of work;
- Laying off workers; or
- Increasing charges to workers for parking, work materials, or equipment.
Employers are prevented from retaliating against any healthcare worker for opposing any of the above practices. Taking an adverse employment action against an employee within 90 days of the employee's exercise of rights protected by this new law raises a rebuttable presumption of retaliation.
A one-year court approved waiver of this wage increase may be obtained by employers that demonstrate by substantial evidence that compliance would raise substantial doubt about the employer's ability to continue as a going concern under generally accepted accounting standards. To reach this standard, employers must include documentation of the employer's financial condition and that of any parent or affiliated entity. Furthermore, the employer must provide evidence of the actual or potential direct financial impact of compliance with this article.
Private healthcare employers have already begun taking steps to challenge the new ordinance, seeking to place the ordinance on the ballot for referendum in 2024. If successful, the ordinance would be placed on hold until the 2024 vote takes place.
This new ordinance provides important new obligations for many private healthcare employers located in the City of Los Angeles. Private healthcare employers should contact their attorneys to ensure compliance with this new ordinance.
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