Sacramento, California – California health care workers may have to wait longer for the state-ordered minimum wage increase as Governor Gavin Newsom seeks changes to a law he signed just three months ago due to the state’s projected $38 billion budget deficit.
The law, which aimed to set the health care industry on a path to a $25 minimum wage, was expected to take effect in June, but the proposed changes could potentially push back that schedule even further. Newsom wants to ensure that the wage increases occur when the state’s fiscal outlook is healthier.
The governor’s office disclosed that they had publicly discussed the possibility of clean-up legislation soon after Newsom signed the law. It was mentioned in a Los Angeles Times article published three weeks after the law was signed, where another spokesperson stated that the administration was working on accompanying legislation to account for state budget conditions and revenues.
Newsom included his request for a delay in the state budget proposal he released on Wednesday. The proposed changes will be presented in the form of a new bill later this month and he is working with legislators and the law’s proponents to craft these changes. Newsom’s budget proposal also seeks to clarify whether state health workers are exempt from the law.
The law was one of two bills signed last fall raising the minimum wage for certain workers in specific industries. Another law that raises the minimum wage for fast-food workers to $20 an hour is moving forward, while the California minimum wage for other workers is currently at $16.
The bill, which was sponsored by SEIU and a group of health care employers, was signed without a clear cost estimate. Newsom’s Department of Finance released a price estimate in November, projecting it would cost the state approximately $4 billion in 2024-25, with $2 billion coming out of the state general fund.
The goal of the health worker pay law is to create more sustainable incomes to retain and attract workers in a field that has been dealing with serious staff shortages. Before securing a statewide boost in pay, SEIU California pushed to increase wages for health workers at the local level through city ordinances and ballot measures. In 2022, the union secured its first local win in the city of Inglewood, where health workers at private health facilities qualified for a new floor wage of $25.