Local hospitals and their associations are suing Los Angeles over its recent move to bolster the minimum wage to $25 an hour at privately owned hospitals and other health facilities.
The lawsuit, filed this week in federal court by the California Hospital Assn., the Hospital Assn. of Southern California, and three L.A. hospitals, argues that the wage measure arbitrarily singles out only some health facilities for higher wages.
“The hastily approved ordinance is unequal and unfair,” Hospital Assn. of Southern California President and Chief Executive George W. Greene said in a statement. “It excludes workers at 90% of healthcare facilities in the city of Los Angeles for no apparent reason. It discriminates against healthcare workers and providers alike, and we are asking the courts to overturn it.”
The Los Angeles City Council opted last month to pass the wage increase, which was championed by the healthcare workers union SEIU-UHW, instead of sending the question to the November ballot for voters to decide.
Proponents argued that the wage increase would help retain critical workers who have felt disrespected and undervalued as the COVID-19 pandemic has dragged on. At City Hall, workers testified that they had struggled to pay their bills.
Rob Wilcox, a spokesperson for City Atty. Mike Feuer, said his office would review the lawsuit filed by the hospital groups and had no further comment. SEIU-UHW spokesperson Renée Saldaña called it “appalling that a small group of wealthy hospital executives is filing a lawsuit to cut healthcare workers’ wages right as COVID-19 hospitalizations rise in Los Angeles.”
“As healthcare workers are once again called to care for the community, hospitals are showing they are more concerned about protecting their profits than supporting the front-line caregivers fighting this pandemic,” Saldaña said.
The L.A. ordinance covers a range of employees — including janitors, nursing assistants, security guards and clerical workers but not managers or supervisors — at privately owned hospitals and dialysis clinics, as well as clinics and skilled nursing facilities that are tied to private hospitals. It does not include many other employers, including community clinics not tied to private hospitals.
The hospital associations argued that boosting wages at some facilities would make it harder for others, including community clinics already struggling with staff shortages, to hang on to employees. “Why work for $16 an hour at a family planning clinic when you can get $25 an hour down the street at a dialysis clinic?” the hospital groups argued.
In reaction to such concerns, SEIU-UHW has pointed out that it is backing a state bill that would increase wages to at least $25 an hour at federally qualified health centers, which provide care to underserved areas or populations. The union also argued that the city could not legally set rates for county or state workers.
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In their lawsuit, the hospital groups also argued that the wage increase would hit the affected hospitals with an abrupt increase in costs, which would be especially burdensome for providers that rely heavily on government revenue. Among the hospitals suing over the measure is Barlow Respiratory Hospital, which said in the lawsuit that it “may very well cease to exist” if forced to make wage increases under the ordinance.
The L.A. ordinance includes a one-year waiver for health facilities that can demonstrate in court that hiking hourly wages to $25 would threaten their ability to keep operating. The hospital groups argued that was “illusory” because the law does not set out any expedited process to obtain such a waiver, making it impossible to get before the L.A. ordinance goes into effect in mid-August.
Hospital groups have also launched a campaign to halt the wage measure by gathering signatures for a referendum that could put the ordinance on hold until an election to decide its fate. To do so, they need to obtain nearly 41,000 valid signatures from L.A. voters within 30 days.
SEIU-UHW, in turn, is now pursuing another L.A. city measure — this one aimed at limiting pay for healthcare executives at private hospitals and other specified facilities. Union officials began the process this week by submitting the text of two different versions of the initiative — one initially capping compensation at $450,000, the other at $250,000 — to the L.A. city clerk.