City of Sacramento
Law and Legislation Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-00770 6/20/2023 Discussion Item 3.
Consideration for Adopting an Ordinance Relating to Healthcare Worker Minimum Wage in the City of Sacramento
File ID: 2023-00770
Location: Citywide
Recommendation: Provide direction on whether to pursue an Ordinance to impose a healthcare worker minimum wage in the City of Sacramento.
Contact: Consuelo Hernandez, Director of Governmental Affairs, 916-808-7395, [email protected], Office of the City Manager Presenter: Consuelo Hernandez, Director of Governmental Affairs, 916-808-7395, [email protected], Office of the City Manager Attachments:
1-Description/Analysis
2-Template Minimum Wage Ordinance
Description/Analysis
Issue Detail: Proponents of healthcare worker minimum wage ordinances argue that raising wages will help retain staff and attract more workers to the healthcare industry, which could improve patient care. Because the measures are city ordinances, they would not apply to state- and county-run medical facilities, only private hospitals and clinics.
Under current state law, the minimum wage is $15.50 per hour. After January 1, 2023, the minimum wage will be increased annually using the change in the seasonally adjusted U.S. Consumer Price Index (CPI), but no more than 3.5 percent per year, with the resulting amount rounded to the nearest ten cents. The increase is to be calculated on August 1st to take effect on January 1st of the following year.
File ID: 2023-00770 6/20/2023 Discussion Item 3.
Several California cities have passed or introduced ordinances requiring a $25 per hour minimum wage for health care workers. Certain cities, including Los Angeles, Long Beach, and Downey, have passed or introduced ordinances which were challenged and paused after petitions for referendum were submitted to instead put the matter before city voters. Several of these have been certified and will appear on their next city election ballots. In November 2022, voters in Inglewood passed Measure HC, setting a citywide $25 minimum wage for healthcare workers going into effect on January 1, 2024. The new $25 minimum wage applies to private-sector healthcare workers who work in hospitals, integrated health systems, and dialysis clinics in Inglewood. Most recently, in February 2023, City of Lynwood voted to approve a $25 minimum wage for healthcare worker ordinance to take effect May 22.
Currently, legislation is pending before the state legislature to increase the minimum wage for healthcare workers to $25 per hour. Senate Bill 525 (SB 525) would require a healthcare worker minimum wage of $21 per hour for hours worked in covered healthcare employment commencing June 1, 2024 and until June 1, 2025. Commencing June 1, 2024, SB 525 would require a healthcare minimum wage of $25 per hour. The legislature would have to approve SB 525 on or before September 9, 2023, for it to be considered by the Governor.
Staff seeks the Committee’s feedback regarding a potential healthcare worker minimum wage ordinance in Sacramento.
Policy Considerations: On February 14, 2023, the City Council passed Motion No. 2023-0042. The motion added Councilmember Valenzuela’s request that the Law and Legislation Committee consider an ordinance relating to healthcare worker minimum wage in the City of Sacramento to the City Manager’s Council Follow Up Log, pursuant to then-Rule 7.A.2 of the Council Rules of Procedure.
Economic Impacts: Covered private employers of healthcare workers may be impacted if they are required to increase workers’ minimum wages.
Environmental Considerations:
California Environmental Quality Act (CEQA): This action is not a project subject to CEQA because it involves only general policy and procedure making and does not have the potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. (CEQA Guidelines, §§ 15002(d), 15378(b)(2), 15061(b)(3).)
Sustainability: None.
Commission/Committee Action: None.
File ID: 2023-00770 6/20/2023 Discussion Item 3.
Rationale for Recommendation: This report is in response to a request to consider a healthcare worker minimum wage ordinance. Future updates and guidance on this matter may be directed by the Committee.
Financial Considerations: None at this time.
Local Business Enterprise (LBE): Not applicable.
1 Ordinance No. ____________________________
An ordinance to add ___ of the ____ Municipal Code, establishing the “ Healthcare Workers Minimum Wage Ordinance. ”
THE CITY COUNCIL OF THE CITY OF []
DOES ORDAIN AS FOLLOWS:
SECTION 1. Name.
This measure shall be known as the “ Healthcare Workers Minimum Wage Ordinance.” SECTION 2. [] entitled HEALTHCARE WORKERS MINIMUM WAGE, is added to [] of the [] Municipal Code, to read:
Findings and Purposes.
This Ordinance, adopted by the City of [] makes the following findings and has the following purposes:
a. The purpose of this Ordinance is to establish a minimum wage for covered healthcare workers within the City of []
b. The City of [] needs a sufficient healthcare workforce to ensure that life -saving healthcare facilities , including those vital to the safety -net, such as hospitals, health systems, community clinics, and dialysis clinics offer consistent , timely, high-quality care. Workers at acute care facilities provide vital services including emergency care, labor and delivery, psychiatric care, cancer treatments, and primary and specialty care.
Similarly, dialysis clinic workers provide life -preserving care to patients with End -Stage Renal Disease and are part of the continuum of kidney care that also includes hospitals , clinics, and health systems . Community clinics are essential safety -net providers that provide primary, dental , and behavioral health care to underserved communities . Fully- staffed community clinics help patients manage and prevent chronic conditions and stay healthy, minimizing unnecessary emergency room visits and hospitalizations. Hospitals, health systems, community clinics , and dialysis clinics are facing staffing shortages that could jeopardize the availability of care in our city. Even before the COVID pandemic, California was facing an urgent and immediate shortage of health care workers, adversely impacting the health and well-being of Californians, especially economically disadvantaged Californians. The COVID-19 pandemic has worsened these shortages .
Healthcare job vacancies are risi ng as workers on the frontlines deal with the emotional, mental, and physical fallout of providing healthcare during a pandemic. Workforce shortages across industries also mean that the healthcare industry is competing with other economic sectors to fill c ritical non-clinical positions such as for cleaning staff, food service workers, and IT administrators. With rising housing costs, healthcare workers are being forced to live further from their places of work, increasing their stress and leading to retention challenges. The se healthcare facilities need to fairly compensate workers who are sacrificing every day to care for their patients. Raising the minimum wage in [] will help address retention challenges and workforce shortages which negatively impact car e for vulnerable patients receiving life -saving, complex care or essential preventive care in settings such as emergency rooms, operating rooms, community clinics, and dial ysis clinics, and will help to ensure that these healthcare facilities, including those serving 2 underserved populations , are maintaining a robust workforce able to meet the challenges affecting our community.
4-35.1 Definitions.
The following definitions shall apply to this chapter :
a. “City” means the City of [].
b. “Covered Healthcare Facility ” means the following types of facilities or work sites , provided that they are privately owned and are located within the boundaries of the City:
1. A licensed general acute care hospital as defined in Section 1250(a) of the California Health and Safety Code, including a distinct part of any such hospital .
2. A clinic, as defined in Section 1206(d) of the California Health and Safety Code, that is 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 a distinct part of any such hospital.
4. A community clinic as defined in Section 1204(a)(1)(A) of the California Health and Safety Code, including a primary care clinic , or a chronic dialysis clinic as defined in Section 1204(b) (2) of the California Health and Safety Code .
5. A licensed ps ychiatric health facility as defined in Section 1250.2 of the California Health and Safety Code.
6. A federally qualified health center, as defined in Section 1396d(l)(2)(B) of Title 42 of the United States Code, including FQHC look-alikes .
7. A facility or other work site that is part of an Integrated Healthcare Delivery System.
c. “Covered Healthcare Worker” means an Employee who is Employed to work at or by a Covered Healthcare Facility to provide patient care, healthcare services, or services supporting the provision of healthcare. “ Covered Healthcare Worker” includes a clinician, professional, non-professional, nurse, certified nursing assistant, aide, technician, maintenance worker, janitorial o r housekeeping staffperson, groundskeeper, guard, food service worker, laundry worker, pharmacist, administrative worker and business office clerical worker. A “Covered Healthcare Worker” works at a Covered Healthcare Facility only if that individual’s primary place of employment is physically located at one or more such facilities or work sites; for example, delivery workers employed primarily outside a Covered Healthcare Facility are not Covered Healthcare Workers for purposes of this chapter unless E mployed by a Person that owns, controls or operates a Covered Healthcare Facility .
d. “Covered Physician Group” means a medical group practice, including a professional medical corporation as defined in Section 2406 of the California Business and Professions Code, another form of corporation controlled by physicians and surgeons, a medical partnership, or an independent practice association , provided that t he group includes a total of 10 or more physicians .
3 e. “Employ” means to engage, suffer, or permit to work. f. “Employee” means any person E mployed by any E mployer. g. “Employer” means any Person , including a corporate officer or executive, who directly or indirectly or through any other Person, including through the services of a temporary service, staffing agency, or similar entity, Employs or exercises control over the wages, hours or working conditions of any Employee .
h. “Integrated Healthcare Delivery System ” means an entity or group of related entities that includes both of the following: (1) one or more hospitals and (2) one or more Covered Physician Groups , health care service plans, medical foundation clinics, other health care facilities, or other entities, providing health care or supporting the provision of health care, where the hospital or hospitals and other entities are related through:
1. Parent/subsi diary relationships, joint or common owner ship or control , common branding, or common boards of directors and shared senior management ; or
2. A contractual relationship in which affiliated Covered P hysician Groups or medical foundation clinics contract with a health care service plan , hospital or other part of the system , all operating under a common trade name ; or
3. A contractual relationship in which a nonprofit health care service plan provides medical services to enrollees in a specific geographic region of the state through an affiliate d hospital system, and contracts with a single Covered Physician Group in each geographic region of the state to provide medical services to a majority of the plan’s enrollees in that region.
i. “Minimum Wage” means the minimum amount that must be paid to Covered Healthcare Workers as compensation for their labor, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation. “Minimum Wage” does not include bonuses, shift differentials, premium pay, reimbursement or allowances for work -related equipment or other expenses, credits for meals or lodging, tips, gratuities, or the cost of medical, dental, retirement or similar benefits.
j. “Person” means an individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, business trust, estate, trust, association, joint venture, agency, instrumentality, or any other legal or commercial entity, whet her domestic or foreign.
4-35.3 Payment of Minimum Wage to Covered Healthcare Workers . a. An Employer shall ensure that each Covered Healthcare Worker it Employs is paid a Minimum Wage equivalent to no less than the hourly rate set forth herein or under the authority of this chapter for hours worked within the geographic boundaries of the City . b. The Minimum Wage for Covered Healthcare Workers shall be as follows:
1. On the effective date of this chapter, the Minimum Wage shall be not less than $25 per hour for all hours worked as a Covered Healthcare Worker .
2. One year (365 days) after the date this c hapter takes effect , and annually thereafter on the same date , the Minimum Wage shall increase based on the 4 annual increase in the cost of living for the preceding twelve months, as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI- W) for the [] area, which is published by the Bureau of Labor Statistics. If the change to the cost of living over the applicable twelve months is negative, the Minimum Wage shall not increase or decrease. The City shall annually publish a bulletin announcing the adjusted Minimum Wage.
c. An Employer may not fund the Minimum Wage increases required by this chapter in any of the following ways:
1. Reducing Covered Healthcare Workers’ premium pay rates or shift differentials;
2. Reducing vacation , healthcare, or other non-w age benefits of any Covered Healthcare Worker;
3. Reducing Covered Healthcare Workers’ hours o f work;
4. Laying off Covered Healthcare Workers ; or
5. Increasing charges to any Covered Healthcare Worker for parking, work-related materials or equipment .
d. An Employer is in violation of s ubsection c of this s ection if the Minimum Wage requirements of this chapter are a motivating factor in the Employer’s decision to take any of the actions described in subsection c of this s ection, unless the Employer proves that it would have taken the same action at the time that it did irrespective of the operation of this chapter .
4-35.4 Retaliation.
No Employer shall discharge, terminate a contract with, reduce compensation to, or otherwise discriminate against or take adverse action against any Covered Healthcare Worker for opposing any practice proscribed by this chapter , for participating in proceedings related to this chapter , for seeking to enforce rights under this chapter by any lawful means, or for otherwise asserting rights under this chapter . Protections o f this section shall apply to any Covered Healthcare Worker who mistakenly, but in good faith, alleges noncompliance with this chapter . Taking any adverse action against a Covered Healthcare Worker within 90 days of the Covered Healthcare Worker’s exercise of rights protected under this chapter shall raise a rebuttable presumption of having done so in retaliation for the exercise of such rights. 4-35.5 Posting and Payroll Records .
a. Covered Healthcare Facilities shall post in a conspicuous place a notice of the current Minimum Wage for Covered Healthcare Workers required by this chapter . b. Employers of Covered Healthcare Workers shall retain payroll records pertaining to Covered Healthcare Workers for a minimum of four years, and shall allow the City or its designee access to such records, with appropriate notice and during business hours, to monitor compliance with the requirements of this chapter . 4-35.6 Enforcement and Implementation.
a. The City shall have responsibility for enforcement of this chapter, including, at a minimum:
1. Establishing a process for reporting complaints of violations of this chapter . 5 2. Establishing and implementing processes for investigating complaints and other possible violations of this chapter . Employers and Covered Healthcare Facilities shall cooperate fully in any such investigation.
3. Establishing and implementing an administrative citation process that may include the issuance of correction orders, a hearing and appeal process, and the imposition of administrative fines or penalties owed to the City.
4. Taking appropriate enforcement action through the administrative citation process, civil actions, or other approaches on behalf of Covered Healthcare Worker s, collecting back wages and any other amounts owed to Covered Healthcare Workers, and disburs ing them to Covered Healthcare Worker s.
5. Conducting any other education and enforcement activities necessary to ensure compliance with this chapter .
b. The City is authorized to promulgate rules and regulations and issue determinations and interpretations relating to this chapter that are consistent with its pu rposes. c. A Covered Healthcare Worker, a representative of a Covered Healthcare Worker, the City Attorney, or another Person acting on behalf of the public as provided for under applicable state law may bring a civil action in a court of competent jurisdiction against an Employer violating this chapter . If the City, a Covered Healthcare Worker, or a representative of a Covered Healthcare Worker prevails in the action, the C ourt shall impose all remedies available under the law or in equity, including injunctive or other equitable relief, reinstatement, the payment of any wages unlawfully withheld, the payment of penalties in the amount of up to $120 to each Covered Healthcare Worker for each day that a violation occurred or continued, and reasonable attorneys’ fees and costs. For retaliatory action by the Employer, the Covered Healthcare Worker shall be entitled to reinstatement and a trebling of all wages and penalties owed. A ny other Person enforcing this chapter on the public’s behalf , upon prevailing, shall be entitled to an award of only equitable, injunctive, and/or restitutionary relief, and reasonable attorneys’ fees and costs . 4-35.7 No Waiver of Rights.
Any waiver by a Covered Healthcare Worker of any or all of the provisions of this chapter or of rights or protections afforded under the authority of this chapter shall be deemed contrary to public policy and shall be void and unenforceable.
4-35.8 Coexistence with Other Available Relief.
The provisions of this chapter shall not be construed as limiting any Covered Healthcare Worker’s right to obtain relief to which the Covered Healthcare Worker may be entitled at law or in equity.
4-35.9 One-Year Court-Granted Waiver.
This chapter is not intended to cause reduction in employment or work hours for Covered Healthcare Workers. Therefore, a court may grant a one -year waiver from the Minimum Wage requirements of this chapter if an Employer can demonstrate by substantial evidence that compliance with this chapter would raise substantial doubt about the Employer’s ability to continue as a going concern under generally accepted accounting standards . The evidence must include documentation of the Employer ’s financial condition, as well as the condition of any 6 parent or affiliated entity , and evidence of the actual or potential direct financial impact of compliance with this chapter . A one-year waiver granted by a court pursuant to this section does not exempt an Employer from complying with any and all federal, state , or local laws and regulations, including any other applicable federal, state, or local minimum wage requirement . 4-35.10 Severability.
If any subsection, sentence, clause, phrase, or provision of this chapter is found invalid or unconstitutional by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect.
SECTION 3. Effective Date .
This Ordinance shall take effect 90 days after it is approved and adopted by City Council in order to allow covered Employers adequate time to implement its requirements .