On June 29, 2022, the Los Angeles City Council approved a new minimum wage ordinance for certain healthcare workers at privately-owned healthcare facilities within the City of Los Angeles. The mayor is anticipated to sign the ordinance, which will become effective 30 days after his signature.

Minimum Wage

On the effective date of the ordinance, the minimum wage for covered employees will be $25 per hour.

On January 1, 2024, and annually thereafter, the minimum wage shall increase based on the annual cost of living, as measured by the Consumer Price Index for the Urban Wage Earners and Clerical Workers for the Los Angeles metropolitan area.

The ordinance expressly bars employers from funding the wage increase by laying off workers, reducing their hours, reducing their vacation, healthcare, or other non-wage benefits, or increasing charges they incur for parking or work-related materials and equipment.

Covered Facilities

The ordinance includes, but is not limited to, the following privately-owned healthcare facilities located within the City of Los Angeles:

• General acute care hospitals;

• Acute psychiatric hospitals;

• Clinics that are part of general acute care hospitals and acute psychiatric hospitals;

• Skilled nursing facilities that are part of general acute care hospitals and acute psychiatric hospitals;

• Residential care facilities for the elderly that are located or licensed at the same address or located on the campus of an acute psychiatric hospital; and

• Chronic dialysis clinics.

Covered Employers

The new minimum wage applies to employees of “covered facilities” who provide patient care, healthcare services, or services supporting the provision of healthcare, including clinicians, nurses, certified nursing assistants, aides, technicians, maintenance workers, janitorial or housekeeping staff, groundskeepers, guards, food service workers, laundry workers, pharmacists, nonmanagerial administrative workers, and business office clerical workers.

The ordinance does not apply to managers or supervisors, as well as employees whose primary work assignments are principally outside a covered facility, like delivery workers.

One-Year Waiver

If an employer can demonstrate by substantial evidence that compliance with the ordinance would raise substantial doubt about the employer’s ability to continue to operate the facility, a court of competent jurisdiction may grant a one-year waiver from the $25 per hour minimum wage requirement. Substantial evidence includes documentation of the employer’s financial condition, as well as the condition of any parent or affiliated entity, and evidence of the actual and potential direct financial impact of compliance with the ordinance. The one-year waiver does not exempt the employer from complying with all other federal, state, or local laws and regulations, including any other applicable minimum wage requirements.