CA Gov. Gavin Newsom hedshot
California Gov. Gavin Newsom

In the wake of  a projected $38 billion deficit, California Gov. Gavin Newson (D) is reevaluating an incremental minimum wage increase to $25 an hour for nursing homes, assisted living and other healthcare-related workers, which he signed into law in October. That’s according to media reports.

California has the largest number of skilled nursing facilities and assisted living communities of any state, according to SNF Data and Statista

The current minimum wage increase plan would affect approximately 400,000 workers in the Golden State. It is meant to increase the state’s hourly minimum wage from its current $15.50 for healthcare-related workers. The incremental wage increase for covered workers would be $23 per hour from June 1, 2024, to May 31, 2025; $24 per hour from June 1, 2025, to May 31, 2026; and $25 per hour from June 1, 2026.

The Newsom administration was opposed to the dramatic wage increase at the onset of discussions. Other opponents included the California Assisted Living Association, the California Association of Health Facilities, LeadingAge California and the California Chamber of Commerce, which argued that the “astronomical increase in labor costs that will result from SB 525 is simply not sustainable.”

According to KFF Health News, “the governor’s latest budget asks the state legislature to add an annual trigger making the minimum wage increases contingent on state revenues and to clarify which state employees are included, citing ‘the significant fiscal impact’ of the law.” 

Newsom told reporters Wednesday that he had been assured that such triggers would be forthcoming, “even though it wasn’t in the bill,” multiple media outlets reported. 

“We’re confident all parties that committed to that agreement are going to meet it and do so very shortly,” the governor said.