California Governor Jerry Brown recently signed Senate Bill 3 which will gradually increase California’s minimum wage from $10 to $15 by January 1, 2022.
For employers with 26 or more employees, the California minimum wage will increase based on the following schedule:
|January 1, 2017||$10.50|
|January 1, 2018||$11.00|
|January 1, 2019||$12.00|
|January 1, 2020||$13.00|
|January 1, 2021||$14.00|
|January 1, 2022||$15.00|
Companies with 25 or less employees are allowed an extra calendar year to comply with each of the increases. For example, minimum wage will increase to $10.50 on January 1, 2018, will increase again to $11.00 on January 1, 2019 and so on until eventually reaching $15.00 per hour on January 1, 2023.
After 2022 (or 2023 for companies with 25 or less employees), increases to minimum wage will be automatic based on inflation data from the US Bureau of Labor Statistics.
The new law includes a provision which allows the governor to suspend minimum wage increases if it is determined, based on certain economic factors, that the state is in recession.
California employers should review the wages of all employees now to plan for any necessary wage increases to remain in compliance with the new minimum wage increase schedule.
NOTE: In California there are eleven cities and counties in the state with their own minimum wage: Berkeley, Emeryville, Los Angeles (city and county), Mountain View, Oakland, Palo Alto, Richmond, Sacramento, San Francisco, San Jose and Santa Clara. Employers in these cities/counties should be sure that all of their employees are paid more than the higher of the local and state minimum wage rates each year.
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