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The Kaiser Permanente contract: 21% raises, and other details of the deal

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A week after a strike, the California-based system and union leaders say they have a tentative agreement. Both sides called it “historic” in terms of compensation and in addressing staffing levels.

Kaiser Permanente and its unions have reached a tentative deal on a new four-year contract. Union workers will begin voting to ratify the deal next week. (Image: SEIU-UHW)

Kaiser Permanente and its unions have reached a tentative deal on a new four-year contract. Union workers will begin voting to ratify the deal next week. (Image: SEIU-UHW)

While the date carries ominous superstition, it appears that Friday the 13th brought some good fortune to Kaiser Permanente and unions in their contract negotiations.

The California-based health system and the Coalition of Kaiser Permanente Unions announced Friday that they had reached a tentative agreement on a four-year contract. The deal comes after more than 75,000 union workers, including nurses, pharmacists, radiology technologists, and others, walked out last week.

The agreement represents a remarkable turnaround. Union leaders said earlier this week that there could be a second strike in November if there isn’t an agreement.

Representatives from Kaiser Permanente and union leaders held a press conference Friday afternoon to discuss the deal. Acting U.S. Labor Secretary Julie Su, who participated in the talks, joked that it was probably good that the news conference didn’t feature video after the overnight negotiations.

Both labor leaders and management described the deal as “historic” in terms of provisions on pay and staffing levels. After months of difficult talks, the leaders on both sides of the table spoke with notable enthusiasm.

Caroline Lucas, executive director of the Coalition of Kaiser Permanente Unions, called it “a historic moment that we are all in together.”

Steve Shields, senior vice president of Kaiser Permanente who leads the system’s labor relations, said the deal offers a lot of positives.

“I'm very excited about this agreement,” Shields said. “I think it is great for Kaiser Permanente. I think it is great for our employees and the unions that represent.”

The union’s rank-and-file still must ratify the agreement. Union members are expected to begin voting on Oct. 18.

Here are some of the details about the tentative agreement announced by union leaders and Kaiser, and how it came together.

Caroline Lucas, executive director of the Coalition of Kaiser Permanente Unions, called the tentative deal a "historic agreement." (Image: SEIU-UHW)

Caroline Lucas, executive director of the Coalition of Kaiser Permanente Unions, called the tentative deal a "historic agreement." (Image: SEIU-UHW)

Raises

The deal includes a 21% increase in wages over the length of the four-year contract.

Dave Regan, president of SEIU-United Healthcare Workers West, touted the economic benefits of the deal. SEIU-UHW represents about 60,000 workers, the bulk of the employees in the Coalition.

“People under this tentative agreement can rightfully expect to make real economic progress,” Regan said.

He also pointed out that the wages apply equally across Kaiser, which has facilities in California, Colorado, Oregon, Washington, Hawaii, Maryland, Virginia, and Washington, D.C.

“We've never achieved a contract settlement that had equivalent, annual pay increases for people no matter what part of the country they're in,” Regan said. “Given the pandemic, given the state of the economy and inflation, this was something that was enormously important to us, and we're really proud to report that we achieved unified, consistent pay raises.”

Minimum wage

The agreement also sets a new minimum wage across the system. It would be $25 per hour in California, and $23 per hour across the rest of the system’s markets.

“We think this is a first-of-its-kind agreement,” Regan said.

Staffing levels

Union leaders had sought provisions to address staffing shortages, saying it was a key to improve patient safety and to protect workers. Labor and management said the deal would help boost staffing at the system. The unions had said that was an essential part of any agreement.

“In this historic agreement, we've taken steps to try to help resolve that issue,” Shields said.

Regan said there were “groundbreaking agreements to help create new healthcare workers.”

“There's also an unprecedented commitment to create new healthcare workers who are not currently in the industry,” Regan said.

He also said there are provisions in the deal that would help Kaiser employees get more training so they can advance in their careers.

Lucas said workers described staffing as a moral imperative.

“Every single one of our frontline healthcare workers who were here negotiating shared stories from the depths of their heart about how for them, providing healthcare to patients was a calling and that their advocacy for safe staffing was a moral imperative, and that they were looking forward to continuing their career at Kaiser Permanente,” Lucas said.

Outsourcing and subcontracting

Earlier this week, union leaders said the issue of outsourcing was emerging as a growing sticking point in the deal. Union leaders said they didn’t want to see Kaiser workers lose their jobs to outsourcing or subcontracting.

The Coalition says that the agreement offers provisions to keep Kaiser workers in their jobs.

Acting U.S. Labor Secretary Julie Su played an important role in getting a deal done. (Image: U.S. Department of Labor)

Acting U.S. Labor Secretary Julie Su played an important role in getting a deal done. (Image: U.S. Department of Labor)

Reaching the deal

Labor leaders and Kaiser executives praised the acting labor secretary for playing a key role in reaching a tentative agreement. She arrived Thursday and also engaged in talks last week.

Su “worked consistently to problem solve and chart a path forward. And I think it's fair to say that her involvement was a critical piece of getting this done,” Regan said.

Shields also singled Su out for praise in the news conference.

“I also want to thank Secretary Su for helping us bring these negotiations to a successful conclusion,” Shields said. “And there's a number of elements in this tentative agreement, where we have common interests. And I think Secretary Su, you helped us see that on a number of occasions.”

Impact on rates

Kaiser Permanente operates 39 hospitals and more than 600 other medical offices in several states. Kaiser’s health plan serves nearly 13 million members. During the news conference, Kaiser officials were asked if the contract would lead to an increase in rates.

Shields said Kaiser does not anticipate increases due to the contract.

“I would say it's not our intention that this agreement would have any impact on rates,” Shields said. “We have an obligation to our members to make sure we're delivering affordable healthcare. And a big part of that is managing the expenses associated with our company. And so this agreement alone would obviously not translate into changes in rates just due to this labor contract.”

Mending fences

Union leaders acknowledged it had been a long road to reaching the agreement.

“We hope by rejoining a labor-management partnership, that both Kaiser Permanente and the unions will be able to successfully partner to rebuild their workforce and to create the long term stability in careers that really are critical to delivering safe patient care,” Lucas said.

Regan said the unions want to restore a better relationship with the system.

“Although it's been bumpy, and we've obviously had our challenges, there is a commitment on the part of the unions that comprise the coalition to genuinely say to Kaiser, we want to rebuild the partnership,” he said.

Greg Holmes, Kaiser Permanente’s chief human resources officer, expressed similar sentiments.

“Yes, negotiations can get a little bit bumpy at times,” he said. “But I think we've shown in the past and I think we'll show this again, that we … focus on the mission and support our employees. And so we're looking forward to doing that.”


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