California Gov. Gavin Newsom signed a law in October that gradually increases California's minimum wage for healthcare workers. Three months later, he has indicated that he wants to potentially delay the wage increase in the face of the state's projected $37.86 billion budget shortfall, the Los Angeles Times reported Jan. 10.
The law signed by Mr. Newsom gradually increases the minimum wage for healthcare workers in California beginning this year. Under the original legislation, the minimum wage for healthcare employees increases annually, ranging from $18 to $25 per hour, starting June 1. Healthcare facilities are expected to reach a $25 per hour minimum wage by June 1, 2028, or, for some in rural locations, 2033.
After the bill was signed into law, Mr. Newsom's office released a price estimate of $4 billion in the 2024-25 fiscal year alone. The governor has now outlined his $291.5 billion budget proposal for fiscal year 2024-25, which was released Jan. 10. The proposal includes reconsidering the wage increase for healthcare workers and indicates that the governor seeks to work with lawmakers to add funding restrictions to the healthcare minimum wage law, according to the Los Angeles Times. The newspaper reported that this could delay the wage increase if California revenues drop to a certain level.
Brandon Richards, a spokesperson for the governor's office, told Becker's the healthcare minimum wage law was passed "with a commitment there would be trigger legislation adopted before the budget this year." He said the governor's office talked about that clean up and pointed to a November Los Angeles Times article, in which Alex Stack, another spokesperson for the governor's office, said: "This is an important law to ensure California has a robust healthcare workforce. We're working with legislative leadership and stakeholders on accompanying legislation to account for state budget conditions and revenues."
Mr. Newsom, in releasing his budget proposal Jan. 10, said he is now working with lawmakers and the healthcare minimum wage law's proponents on changes that will be presented later in January, according to CalMatters. The publication also reported that the governor seeks clarification from lawmakers on which state employees are exempt from the law.
The California Department of Finance has said the wage increase would be funded by the state's general fund and by federal funds earmarked for Medi-Cal providers.
Mr. Newsom is expected to unveil his revised budget plan for the upcoming fiscal year in May.