Kaiser, Unions Reach Tentative Labor Contract Deal

More than 80,000 union-represented clerical and other workers in the Kaiser Permanente system appear on track to lock in solid pay raises and benefit improvements under a tentative labor agreement announced Wednesday by the California-based nonprofit system and a union umbrella group, Coalition of Kaiser Permanente Unions.

Workers are set to vote on the package now through the end of October.

If ratified, the four-year agreement covering 11 unions in seven states and the District of Columbia would avert a strike that had been set to begin Oct. 14.

The unions represent cashiers, medical assistants, and coding clerks, to medical equipment technologists and pharmacists.

Management and workers declared they were happy with the deal, which capped five months of talks.

The cost of the agreement to Kaiser is not clear, but the massive health system, a tightly woven network of hospitals, clinics and insurance plans, is financially strong.

Kaiser touted 2017 and 2018 as two of its most profitable years, with net incomes of $3.8 billion and $2.5 billion, respectively. And this year got off to an even faster start: Kaiser reported a whopping $5.2 billion in net income in the first six months of 2019. Kaiser's main revenue source is premiums paid by its growing membership rolls. The company’s model is to gradually build out its network of facilities and steadily bring in more customers to buy Kaiser health insurance and use Kaiser’s facilities.

The profits have boosted Kaiser’s financial reserves. It had $33.6 billion in investments as of June 30, 2018, the latest date for which a number is publicly available.

The previous labor contract between Kaiser and the Coalition of Kaiser Permanente Unions expired June 30. Workers upped the pressure on Kaiser with strike authorization votes this summer and fall.

But workers seem happy not to strike.

“This agreement will allow us to rebuild the worker-management partnership that has been so important to all of us in making Kaiser successful over the last 20 years,” said Georgette Bradford, an ultrasound technologist at Kaiser in Sacramento. “Reaching an agreement was not easy, it had lots of twists and turns, but in the end we accomplished what we set out to do – reach an agreement that is good for patients, workers and our communities.”

Key elements of the deal include:

  • A workforce development program to provide free education to thousands of workers to help fill vacant licensed healthcare jobs. Kaiser will provide $130 over the four years of the contract.
  • Annual cost of living increases of 3 percent in each of the four years for workers in Oregon, southern Washington and California. In Colorado, Hawaii, Virginia, Maryland, the District of Columbia and the rest of Washington State, workers will receive raises of 3 percent the first year and 2 percent plus a 1 percent lump sum the following three years.
  • Workers will also get annual step increases, provided they are not at the top of their scale, which typically has eight steps. The amount of the step increases in the tentative contract was not publicly available Wednesday, but is likely similar to the step increases in the just-ended contract, in which steps were about 4 percent per year.
  • Full protection of retirement benefits for current and future employees, and an expansion of retirement benefits in Hawaii, Virginia, Maryland and the District of Columbia. 

  • A bar on Kaiser for subcontracting or outsourcing some jobs for the life of the contract.
  • An additional $250 for employee travel as part of the tuition reimbursement program, raising the total to $750.

Kaiser in a statement said the agreement “will position Kaiser Permanente … for a sustainable future as the organization works to make its high-quality integrated care model even more affordable and accessible in all its regions.”

“Kaiser Permanente has an unparalleled track record of working constructively with labor to solve problems together to improve the care and service offered to our members and patients,” Kaiser added. “We may disagree at times, but we have always been able to work through our challenges to align on common goals.”

If ratified, the contract will have an effective date of Oct. 1. It would cover more than 85,000 employees: 67,000 in California; 8,300 in Oregon and Washington; 3,100 in Colorado; 5,000 in Maryland, Washington, D.C. and northern Virginia; and 1,000 in Hawaii.

A separate large labor group, representing registered nurses and other similar workers at Kaiser reached a three-year labor contract in late 2018.

You can reach Christian Wihtol at [email protected].


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