California is the first state in the nation to commit to raising the minimum wage to $15 per hour statewide. Employers need to prepare for the minimum wage increase.
Governor Edmund G. Brown Jr. yesterday signed SB 3 (Leno; D-San Francisco), a job killer bill that will increase the minimum wage in California to $15 per hour by 2022 (2023 for companies employing 25 or fewer people since there is a one-year implementation delay for small business).
SB 3 calls for an increase of $.50 per hour beginning January 1, 2017 and an increase of $.50 per hour in January 2018. The rate would increase $1 per year thereafter until 2022. Small business would not be required to begin the scheduled increases until 2018.
Once the minimum wage reaches $15 per hour for all businesses, wages could then be increased each year up to 3.5% (rounded to the nearest 10 cents) for inflation as measured by the national Consumer Price Index.
Until the minimum wage reaches $15, the Governor has discretionary authority to suspend increases based on current economic conditions. However, these “offramps” are discretionary and would come into play only if there are declining state revenues from sales tax, a decline in the labor market or if there is a budget deficit (this offramp is permitted to occur only twice).
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