SB 525 Update
Last Wednesday evening, after almost a full day of discussions and two failed attempts by Senator Durazo (D-Boyle Heights) to move her bill, SB 525 passed a vote of the full Senate and is on the way to the Assembly Labor Committee.
The bill went up for a vote three times without being able to get to the minimum requirement of 21 votes. Senators Archuleta (D-Pico Rivera), Min (D-Irvine), and Allen (D-Santa Monica) were the final three votes in that order. Archuleta flipped from “No” on the first vote to “Aye” on the second vote. Many members expressed significant concerns with the current form of the bill but provided courtesy votes to give the author, Senator Durazo, more time to work on the bill language.
Senator Durazo made a couple of additional concessions to secure the last few votes from her Senate colleagues. It’s our understanding that one of the concessions is a longer implementation period. We are hearing the implementation delay may be moving the minimum wage to $21 in 2024, $23 in 2026, and $25 in 2028. We’ve also heard about a possibility of different minimum wages depending on regions and potentially a carve out for distressed hospitals.
SB 525 could have far-reaching consequences if not amended, and we believe it is essential to voice our concerns. Community health centers are committed to fostering a vibrant and sustainable business environment that benefits employees. While we acknowledge the importance of fair wages, SB 525 in its current form presents several challenges that could adversely affect the way you deliver care. If the author and sponsors do not accept our proposed amendments, CaliforniaHealth+ Advocates will formally move to an oppose position as authorized by our Board.
As SB 525 is considered in the Assembly, we want you to know:
CaliforniaHealth+ Advocates’ position remains in support for higher wages for community health center employees.
Increased wages would increase recruitment and retention of valuable employees and ensure our health centers can continue providing excellent care to our communities; however, efforts to increase wages must be sustainable, equitable, and applicable to all centers, and must not be viewed through a narrow perspective.
Increasing the minimum wage will require community health centers to take a comprehensive review of all staff wages/salaries and scale increases across the board, drastically increasing organizational costs. Any wage increases must fully consider this reality.
Community health centers are not-for-profit and patient-led. They cannot unilaterally increase revenue to pay for increased wages and other inflationary cost increases because they are primarily funded by Medi-Cal and Medicare payments—which are administratively set, fall short of covering the full cost of community-based care and services, and do not allow rate adjustments due to cost increases.
Community health centers are already facing financial challenges that put them on uncertain ground with the impact of the COVID-19 pandemic, loss of millions in 340B funding, and now, the existential threat of losing key federal 330B grant funding which must be reauthorized by Congress this year.
To make these increased wage efforts a reality, CPCA is urging the Legislature and the Governor to take a comprehensive look at how our health centers get reimbursed for the essential services we provide and address the historical underfunding of the Medi-Cal program.
California’s community health centers are a critical part of California’s health care delivery system, providing care for communities of color, people experiencing homelessness, and others who do not have regular access to health care.
Ultimately, our mission is to continue providing excellent, comprehensive care to anyone that walks in our doors. We cannot do that without a talented workforce that is compensated appropriately. However, we are currently prohibited from increasing the costs of our services to meet these wage increases. We are striving to find a solution that both meets the needs of the communities we serve and the employees that provide these critical services.
We value your support and dedication to our community. By working together, we can ensure that policies are enacted that benefit all stakeholders and foster an environment of shared prosperity.
Thank you for your time and commitment!