California to increase its Minimum Wage

Sacramento, California (April 3, 2016)

Governor Jerry Brown of California and state labor leaders announced legislation to increase the states minimum wage from its current rate of $10 per hour to $15 per hour by January 2022.  This was approved by the state legislature on March 31st and will be signed into law by the Governor on Monday, April 4th.

The Governor and legislature were spurred into action last week when a ballot initiative sponsored by the Service Employees International Union and the HealthCare Workers West passed the signature threshold to be placed on the November 2016 ballot.  The ballot initiative, if passed in November, would have raised the minimum wage by one dollar per year until $15 per hour would be reached in 2021.  It also called for the Minimum wage to have future yearly increases tied to inflation and the cost of living index.

The new law will raise the minimum wage over a 6 year period, slightly slower than the ballot initiative would have done.  It also gives the Governor the ability to delay a raise in the minimum wage hike during times of economic downturns.  The scheduled raises are as follows:  $10.50 in 2017, $11.00 in 2018, followed by $1 dollar raises for each subsequent year up to 2022. After 2024 the minimum wage will be adjusted based on inflation.  These cost of living increases could occur later than 2024 in the case of delays in scheduled increases due to an economic downturn. Businesses with fewer than 26 employees will get an extra year to comply with the new rates.

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