The bill, SB799, would have made workers eligible for unemployment payments after two weeks on strike.
Newsom said he vetoed the bill because it would have added strain to California's already overburdened unemployment system. California's unemployment fund is about $19 billion in debt after borrowing heavily from the federal government in 2020 to pay people who were out of work due to COVID-19 pandemic lockdowns.
"Now is not the time to increase costs or incur this sizable debt," Newom wrote in his veto message.
Though the economy has since rebounded, troubles for the state's unemployment fund have continued. This year, the Newsom administration projects the fund will pay out more in unemployment benefits than it collects through taxes for the first time during a period of job growth, according to the Legislative Analyst's Office.
Newsom's veto is sure to anger the Democratic governor's allies in organized labor. Supporters of the measure argued that California workers should be able to access the unemployment funds they have contributed to through taxes when they go on strike.
Business groups that opposed the bill argued that California shouldn't conflate workers who choose to strike with those who are laid off. Businesses face higher taxes because of California's unemployment debt.
Newsom's veto comes several days after film and television writers reached a tentative agreement with movie studios after almost five months on strike. Hollywood actors are still on strike as they seek to negotiate a deal with the studios that will give them a bigger cut of profits from streaming platforms and protections against studios replacing actors with artificial intelligence. Had Newsom signed the bill, it wouldn't have taken effect until January, meaning it would have been months before the bill could have impacted those strikes.
"I have deep appreciation and respect for workers who fight for their rights and come together in collective action," Newsom wrote. "I look forward to building on the progress we have made."
Newsom's record on labor's priority bills for the year has been mixed. On Thursday he signed a bill to set a $20 minimum wage for hundreds of thousands of California fast food workers. But the previous week he vetoed a measure that would have banned driverless trucks, a top issue for labor unions, which worry such technology will put drivers out of work.
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