On Oct. 13, California Gov. Gavin Newsom signed a new law that will gradually raise healthcare workers' hourly minimum wage to $25. Now, weeks later, his administration has estimated the price at $4 billion in the 2024-25 fiscal year, according to the Los Angeles Times.
Half of the price tag will come from California's general fund, and half will be paid for by federal funds designated for providers of the state's Medicaid program, according to the newspaper, citing information from Mr. Newsom's Department of Finance.
The new law comes after union and hospital representatives reached agreement on how a $25 per hour minimum wage for healthcare workers could be addressed.
Under the new law, cities and counties are blocked from increasing pay via ballot measures for 10 years. The new law also factors in amendments that include gradual wage schedules, rather than an immediate increase for all healthcare workers.
Workers at healthcare facilities with 10,000 or more full-time equivalent employees will earn $23 per hour starting in 2024, with pay increasing to $24 an hour in 2025 and $25 an hour in 2026. Smaller facilities and hospitals with a high governmental payer mix will have until 2028 or 2033 to reach the $25 minimum, depending on the type of facility.
The new law allows some healthcare facilities to apply for a temporary pause or alternative phase-in schedule of the minimum wage requirements if they have documentation proving financial distress.
The Times notes that there...
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