Newsom seeks changes to California's new healthcare wage law

California's minimum wage for healthcare workers is set to increase starting in 2024 under legislation signed into law by the governor this fall, which he is now looking to modify. 

California Gov. Gavin Newsom signed legislation in October that will gradually increase the minimum wage for healthcare workers in the state. Starting June 1, 2024, the minimum wage for healthcare employees will increase annually, ranging from $18 to $25 per hour. Healthcare facilities are expected to reach a $25 per hour minimum wage by June 1, 2028 or, for some in rural locations, 2033.

A few weeks after the bill was signed into law, the governor's administration released an estimate that it will cost $4 billion in the 2024-25 fiscal year alone. This comes at a challenging time for California, which projects a $68 billion budget deficit next year.  

Now Mr. Newsom is seeking "major reforms" to the law, the Los Angeles Times reported Dec. 7. It is unclear what the changes will be, whether to the funding structure, scope of the law's applicability or its timeline. 

Mr. Newsom discussed changes to the minimum wage law one week before the state released its projected $68 billion budget deficit. He told the local news outlet the changes were "part of an understanding" reached with labor leaders before he signed the bill in the fall, the LA Times reported. 

"We knew exactly where we are on the finances. We were very upfront with these guys. I said 'no way in hell,' and we worked on something, and that will reveal itself in a matter of weeks," Mr. Newsom told the LA Times

Under the current legislation, hospital employees of all categories will see the minimum wage increase to $23 in June 2024, $24 by 2025 and $25 by 2026. Workers at independent rural hospitals and facilities catering to substantial Medicare and Medi-Cal patient populations will see minimum wage rise to $18 per hour in 2024, climbing to $25 per hour by 2033.

The California Department of Finance said half of the wage increase would be funded by the state's general fund and half would be covered by federal funds earmarked for Medi-Cal providers.

Mr. Newsom is expected to unveil his budget plan for the upcoming fiscal year on Jan. 10.

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