Unions hope tentative deal with Kaiser Permanente sends a message about two-tier wage systems

The side of a building that reads "Kaiser Permanente"
Kaiser Permanente fought "till the bitter end" to keep a two-tier wage system in a tentative labor deal, a key union negotiator said. (Sundry Photography/Shutterstock)

The collection of unions that brokered a deal with Kaiser Permanente to avoid a major strike hope the tentative agreement sends ripples across the healthcare industry over the use of a two-tier wage system that applies wage cuts to newer members.

Kaiser and the Alliance of Health Care Unions, a collection of 21 healthcare worker unions, reached a tentative deal Saturday on new contracts that include an across-the-board wage hike. The deal, which still must be ratified by the unions’ members, averted a strike of nearly 32,000 workers that was to begin on Monday.

But the key negotiators of the deal hope that it has a major effect beyond the system.

“This will ripple across the country,” said Jane Carter, director of research, public policy and regulatory affairs for the United Nurses Association of California and Union of Health Care Professionals, one of the unions that are part of the Alliance of Health Care Unions, in an interview with Fierce Healthcare.

Carter didn’t divulge the exact financial terms of the wage increases, only that they are significant and extend for the next four years.

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But what wasn’t included is what Carter said was significant.

Kaiser sent a counter offer a few weeks ago that proposed a two-tier wage system that would increase wages by 2% for current employees and several other lump sums. But Kaiser proposed a 15% cut to future member worker wages and benefits.

Carter said that Kaiser pushed the two-tier wage system “till the bitter end” and not pulled until right before the deal was closed.

She said the unions were worried that the two-tier system could create a more divisive workforce if it went into effect.

“It would have created a second class of employees,” she added.

The unions also knew that any final deal that included a two-tier system would not just affect their workers but the whole industry.

“If Kaiser could get two-tier from this workforce it would ripple across the country,” she said. “I think us defeating this archaic scheme from corporate healthcare executives will have the same impact.”

Kaiser did not comment on why it backed off the two-tier approach, referring to a joint press release with the unions announcing the tentative deal.

“These were challenging negotiations, but this tentative agreement demonstrates the strength of our Labor Management Partnership and the unique success it can achieve when we work together,” said Christian Meisner, senior vice president and chief human resources officer for Kaiser Permanente, in the release.

The deal comes amid major labor strife across the healthcare industry and other sectors of the economy. So far there have been more than 30 healthcare strikes that have taken place across the U.S. this year, according to a tracker maintained by Cornell University’s School of Industrial and Labor Relations.

Several of the strikes also centered on wage concerns and safety issues related to fighting the pandemic.

Catholic Health, for instance, ended a five-week strike after securing more pay and adding new staff to combat a shortage.

Other unions have fought two-tier wage systems too. Workers with John Deere, for instance, have been on strike for more than a month and rejected the company’s offers of a two-tier wage system, according to a report in the Washington Post.