Kaiser Permanente is proud to be the largest union-represented health care employer in the U.S. — with nearly 75% of our employees represented by unions. We are currently bargaining with the Coalition of Kaiser Permanente Unions, which represents about 88,000 of our employees in a variety of roles. The Coalition is part of our Labor Management Partnership, the longest-lasting partnership of its kind in the country.
Kaiser Permanente is a leader in employee wages and benefits in every market we are in. In bargaining this year, we are offering across-the-board wage increases, an enterprisewide minimum wage starting at $21 an hour, continuation of our existing excellent health benefits and retirement income plans, and much more. These and our other operational proposals reflect our deep commitment to the economic well-being of our employees.
We have 2 more bargaining sessions scheduled for the week of September 18. Our priority is to reach an agreement that ensures we can continue to provide market-competitive pay and outstanding benefits. Before the national agreement expires on September 30, we are confident we’ll reach an agreement that strengthens our position as a best place to work and ensures that the high-quality care our members expect from us remains affordable and easy to access.
In their announcements on September 14, the Service Employees International Union-United Healthcare Workers West and SEIU Local 49 made several claims that are misleading. We address each of those below:
The union wrongly claims increases in health care costs are not tied to improvements to care. In fact, health care costs are increasing because of increased needs and delayed care in the wake of the pandemic, major increases in costs for drugs and supplies, and increased labor costs because of worker shortages and wage increases. Wages make up more than half of the cost of health care in the U.S. Kaiser Permanente is not immune to these inflationary pressures.
The union claims Kaiser Permanente is “slashing performance bonuses,” when in fact the opposite is true: We are proposing a minimum payment level to protect our employees from receiving no payout. Kaiser Permanente offers nearly all its employees an annual performance bonus that is based on organizational performance on quality and patient safety, financial performance, and supporting our communities, among other factors. In several of the past few years, the performance payout would have been eliminated for many employees, because the organization did not meet its financial goals. (During the pandemic, we actually provided employees with significant rewards each year out of recognition for all their dedicated work, for a total of $276 million in payments to Coalition-represented employees over the past 3 years. And this is in addition to the $800 million in employee assistance we provided our front-line employees to ensure they had access to alternate housing options, special child care grants, and additional paid leave for COVID-19 illness and exposure.) We are proposing putting in a minimum payment level to reduce the chance of that happening again in the future. The union is demanding the program just be turned into a guaranteed payout, regardless of performance, which would defeat the purpose of the program and just make it a part of the wage total.
Because Kaiser Permanente pays at or above market compensation, our costs for flexing our workforce as needed are higher than other health care organizations, which hurts our ability to keep costs affordable for our members and customers. We have asked the Coalition to work with us on ways to increase our ability to be more nimble and affordable when bringing on staff in specific circumstances.
The union claims Kaiser Permanente is offering starting pay below the level of fast-food workers. In fact, we have proposed an enterprisewide minimum wage starting at $21 an hour, higher in some areas and roles. The union wants a $26 an hour minimum wage.
We are leaders in employee wages and benefits in every market we are in. In fact, our philosophy is to deliver compensation that provides wages above the local market (at or up to 10% above market) to attract and retain the best employees. Our very generous health care and retirement benefits add another 50% of value to the overall compensation package. We help our employees build long-term economic security with low-cost health insurance, industry-leading retirement plans, and other benefit programs to support employee health and well-being.
Rising prices are hurting everyone, and are driving up the cost of health care as well. Last week we made a proposal to the Coalition that includes across-the-board wage increases of between 10% and 14% over 4 years — with additional lump sum payments in Southern California — on top of wages that are in many cases already significantly above the market rate for similar jobs.
The union claims Kaiser Permanente is refusing to develop the workforce, or train and recruit new staff. This is not true. In California, we established a nonprofit organization in 2020, Futuro Health, jointly with SEIU-UHW, and provided $130 million in funding. Futuro’s goal is to provide education, and skills training and retraining for workers in health care, and more than 8,000 workers have enrolled in its programs in just the first 3 years.
Kaiser Permanente invests in workforce development directly and through contributions to trust funds managed in partnership with our labor partners, which provide tools and resources to help front-line employees gain new skills and advance in their careers. Resources provided include coaching, training, and apprenticeship programs; scholarships and tuition reimbursement for degree and certification programs; and computers and mobile hot spot devices for qualifying students. In 2022, Kaiser Permanente provided more than $75 million in funding to 3 education trusts, available to more than 135,000 employees. We also provided Kaiser Permanente employees with more than $30 million in tuition reimbursement in 2022, as part of our annual spending to create opportunities for career advancement and a workforce skilled at using technology in the rapidly changing health care field.
Kaiser Permanente and the Coalition agreed to work together to accelerate hiring this year, setting a joint goal in bargaining of hiring 10,000 new people for Coalition-represented jobs in 2023. Kaiser Permanente’s efforts to date have resulted in nearly 9,000 positions filled, and we are aggressively recruiting to fill more. About 96% of candidates for Coalition-represented positions accept our employment offers — significantly above the industry average. We believe this is because talented people recognize the value of our current wage and benefit offerings and want to work at Kaiser Permanente.
A strike authorization vote does not reflect any breakdown in bargaining, nor does it indicate a strike is imminent or will happen at all. It is a disappointing action considering our progress at the bargaining table. Unfortunately, this year, throughout our negotiations we have seen Coalition leaders attempt to rally their unions’ members to threaten a strike despite important progress made through negotiations.
We take any threat to disrupt care for our members seriously and have comprehensive plans to ensure continued access to needed health care services should a strike occur later this year.
We will urge our employees to reject any call for an actual strike and continue to focus on providing high-quality care and service to our members, patients, and communities who need us to be there for them.