LEWISTON — St. Mary’s Health System, the parent organization to St. Mary’s Regional Medical Center and d’Youville Pavilion, a long-term care facility, announced this week that it would increase wages for 1,400 employees at an $8 million annual cost.

St. Mary’s President Steve Jorgensen said Tuesday that the increases are “first and foremost” in recognition of “our amazing staff, what they’ve done in the last 20 months in responding to this pandemic.”

The system, which is owned by Tewksbury, Massachusetts-based Covenant Health, began a “comprehensive salary review” back in March and finalized the adjustments over the past couple of weeks. The new wages will take effect Sunday, Jorgensen said.

In addition to St. Mary’s Regional Medical Center, a 233-bed acute care facility, and d’Youville Pavilion, a skilled nursing home, St. Mary’s Health includes St. Mary’s Residences, a 128-unit independent living facility, St. Mary’s Urgent Care in Auburn and a primary care provider network.

“We have seen the labor market explode over the last 20 months with a shortage of workers. And as a result, pay has been chaotic at best. Most of it (is) moving up and moving up quickly,” he said.

“Many organizations around us have moved their wages and they’ve done it in a number of ways. We wanted to make sure we did this as a systematic approach,” Jorgensen said.

The adjustments will apply to exempt and nonexempt employees but not contracted employees and “those already at market rate,” according to a news release, at a cost of $8 million annually to the system.

“It’s just a way to stay competitive. We know that we’re not going to be the highest paid. We also know we’re not going to be the lowest paid,” Jorgensen said. “But we think with a competitive pay rate, a great benefit package, a great rewarding environment, we feel it’s going to be an attractive place for our employees to do the things they love to do and that’s taking care of patients.”

To pay for this, Jorgensen said St. Mary’s made some changes on the nonclinical side of operations but that clinical services would not be affected nor would there be any layoffs.

“We’re not cutting the central services, we are putting a priority on paying our staff a competitive wage, and doing that by realigning some of our expenses,” he said.

The health care industry in Maine and across the country is facing worker shortages that were exacerbated by the pandemic. Health care systems in Maine have been preparing for a potential exodus of staff next month if a significant number of workers refuse to get vaccinated.

Gov. Janet Mills announced in mid-August that all workers at designated health care facilities must be fully vaccinated by Oct. 1 or lose their job. On Sept. 2, the administration said it would not enforce the mandate until Oct. 29, giving workers and their employers additional time to get vaccinated.

According to the latest data from the Maine Department of Health and Human Services, about 84% of employees at St. Mary’s Regional Medical Center and 72.5% of workers at d’Youville Pavilion are fully vaccinated as of Aug. 31. That number includes employees who primarily work at offices off the medical center campus but have hospital privileges, as well as contractors and volunteers.

Jorgensen said St. Mary’s decision to increase wages was not in response to potential shortages brought on by workers who refuse to get vaccinated.

About 350 employees systemwide are unvaccinated as of Aug. 31, according to the DHHS dashboard, and while some staff members have expressed that they do not want to get vaccinated, only a “handful” have actually left their jobs so far, he said.

“It was a (labor) shortage before the pandemic,” Jorgensen said. “I think the pandemic has accelerated the need for many organizations to make adjustments in their pay and the flexibility of schedules and a number of factors to retain and recruit the needed staff.”