Governor Brown Signs Bill to Increase Minimum Wage

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Governor Brown Signs Bill to Increase Minimum Wage

On March 31 the California Legislature passed SB 3 (Leno; D-San Francisco) that will increase the minimum wage in California to $15 per hour by 2022. Governor Jerry Brown signed the bill on April 4, making California the first state to commit to a $15 minimum wage.

SB 3 calls for an increase of 50 cents per hour beginning January 1, 2017, and an increase of 50 cents per hour in January 2018. The rate would increase $1 per year thereafter until 2022. Once the minimum wage reaches $15, it will be adjusted annually according to national inflation rates. Until the time it reaches $15, the governor has discretionary authority to suspend increases based on current economic conditions, including declining state revenues from sales tax, a decline in the labor market or if there is a budget deficit.

This measure also impacts salaried employees' compensation. In order to exempt employees, they must meet the salary-basis test, which is two times the monthly minimum wage. Under SB 3, that amount will rise from the current annual salary of $41,600 to at least $62,400 by 2022.

CLFP opposed this measure because this unprecedented increase in the minimum wage will significantly increase costs for the food processing industry in California.  

At a March 28th news conference announcing the agreement on SB 3, the governor cited the union-backed minimum wage hike currently qualified to appear on the November ballot as a factor in the discussions. Supporters of the initiative have until the end of June to decide whether to withdraw their measure from the ballot.

Article written by Trudi Hughes, CLFP Government Affairs Director
 

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