A sweeping agreement between labor and the health industry would steadily raise the minimum wage for lots of of hundreds of health staff in California to a nation-leading $25 an hour while ending a years-long battle over dialysis clinics.

The pact approved by state lawmakers on Thursday, the last day of this yr’s legislative session, would phase within the wage increase for hospitals, nursing homes, and other medical and psychiatric services providers. The bill now heads to the governor’s desk. A spokesperson for Democratic Gov. Gavin Newsom, Izzy Gordon, said the governor will evaluate the bill on the merits before his Oct. 14 deadline to act on the laws.

SB 525 would raise the hourly minimum at large health facilities and dialysis clinics to $23 next yr, $24 in 2025, and $25 in 2026. It might boost hourly wages at community clinics to at the very least $21 in 2024, $22 in 2026, and $25 in 2027. Other health facilities would go to at the very least $21 an hour in 2024, $23 in 2026, and $25 by 2028.

The agreement “now strikes a crucial balance between supporting staff and protecting jobs and access to care in a few of our most vulnerable communities,” Carmela Coyle, president and CEO of the California Hospital Association, said in a press release. “The bill creates a pathway to improving wages for our lower-wage health care staff, while also recognizing the needs of our state’s most troubled hospitals.”

The deal is a major union victory during what has been dubbed a “hot labor summer,” with picket lines formed by Hollywood writers and actors, hotel staff, and Los Angeles city employees. Hundreds of nurses might be next. Labor also won a $20 minimum wage for California fast-food staff, a major boost from the present statewide $15.50 minimum wage.

Union leaders say lower-income health staff comparable to certified nursing assistants, patient aides, and food service staff — lots of them racial minorities — need the extra money to maintain up. “Health care in California will likely be more accessible and equitable because staff and healthcare providers stood together and stood up for patient care,” SEIU California Executive Director Tia Orr said of the health care deal.

The phase-in can be slower at hospitals with a high percentage of patients covered by Medicare or Medicaid, rural independent hospitals, and small county facilities. The minimum hourly wage there would go to $18 next yr, then increase annually by 3.5% until it reaches $25 in 2033.

Subsequently, in any respect sites, the $25 minimum wage can be increased annually to maintain up with inflation. Nevertheless, the bill allows health care facilities to use for a brief pause or slower phase-in in the event that they can show state officials that providing the required minimum wage “would raise doubts in regards to the covered health care facility’s ability to proceed as a going concern.”

State Sen. María Elena Durazo, the Los Angeles Democrat who introduced the bill, called her bill “a primary within the nation historic investment in our healthcare workforce.” The measure “is a critical step to making sure that we’re addressing our healthcare workforce shortage,” she said before the bill received final passage late Thursday within the Senate.

As a part of the deal, in a separate memorandum of understanding, Service Employees International Union-United Healthcare Staff West would drop its effort to impose regulations on dialysis clinics through laws and on the ballot box. Voters defeated all three ballot initiatives, most recently last yr, however the fight has cost the dialysis industry lots of of hundreds of thousands of dollars.

California Dialysis Council spokesperson Jaycob Bytel said in a press release that the agreement “protects patients from the continuing threats on the ballot and within the legislature.” It bars for 4 years any laws or statewide or local ballot measures by either SEIU or the dialysis industry.

The union has pushed for wage boosts in several California cities. However the agreement bars local governments from requiring higher local minimum wages for health care staff for 10 years, until 2034. Local governments could set higher local minimum wages, but they need to include all staff.

The unique bill cleared the Senate in May with no votes to spare amid strident opposition from employers, who said they couldn’t afford it. The California Chamber of Commerce put the proposal on its annual “job killer” list, a designation that always is sufficient to kill controversial laws. The No SB 525 coalition, which included hospitals, doctors, and business and taxpayer groups, had said the bill would cost $8 billion annually, endangering services and resulting in higher premiums and better costs for state and native governments.

Republicans who opposed the bill echoed those arguments while saying the increases will harm rural health facilities. “We’ll see hospitals exit of service and we are going to see rural health clinics of course be severely impacted and possibly exit of business,” warned state Sen. Brian Dahle, a Republican who represents rural Northern California.

The bill’s opponents also included the California Nurses Association, which said it could prompt employers to lower wages for registered nurses. The association helped scuttle a push for a $25 hourly minimum wage for health staff a yr ago. That earlier effort failed partially since it was tied to a delay in earthquake-safety upgrades at hospitals.

The University of California-Berkeley Labor Center projected that the rise would boost wages for greater than 469,000 health staff. The middle estimates it might most profit staff of color, who make up 70% of those staff, and ladies, who represent about three-quarters.

The bump would help about 40% of California’s health staff, earning them on average an additional $10,352 a yr and reducing their reliance on Medi-Cal, saving between $181 million and $363 million within the second yr of the wage increase, based on a legislative evaluation. The evaluation said opponents’ $8 billion cost estimate is overblown since it fails to incorporate billions in state assistance to hospitals.

This text was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.