California Passes $15 Minimum Wage Bill

Author: Michael Cardman, XpertHR Legal Editor

UPDATE: Governor Jerry Brown signed the California bill into law on April 4, 2016.

UPDATE: Governor Andrew Cuomo signed the New York bill into law on April 4, 2016.

April 1, 2016

California's legislature on March 31 passed a bill that, if signed by the governor as expected, will raise the state's minimum wage to $15 per hour over the next six years.

The same day, New York's governor announced a deal with state legislators that would dramatically raise the Empire State's minimum wage as well. Like Oregon's recently enacted law, New York's minimum wage would vary by region - rising to $15 by 2018 in New York City and more slowly in other parts of the state.

As the nation's first- and fourth-most populous states, California and New York represent a huge victory for organized labor and other advocacy groups that have campaigned for higher minimum wages under the slogan "Fight for 15."

Policymakers will be keeping an eye on these states as they test the limits of how far the minimum wage can be raised. Many economists believe a $15 minimum wage will result in significant increases in unemployment.

The minimum wage in California will vary depending on the size of the employer, and increase according to the following schedule:

Date 26 or more employees 25 or fewer employees
Current $10.00 $10.00
January 1, 2017 $10.50
January 1, 2018 $11.00 $10.50
January 1, 2019 $12.00 $11.00
January 1, 2020 $13.00 $12.00
January 1, 2021 $14.00 $13.00
January 1, 2022 $15.00 $14.00
January 1, 2023 $15.00
January 1, 2024 (and every January 1 thereafter) Adjusted for inflation

Starting on January 1, 2024, and continuing every January 1 thereafter, the minimum wage will be adjusted for inflation -- increased by either 3.5% or by the rate of change in the US Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the 12-month period preceding the previous June 30, whichever is less. The result will be rounded to the nearest 10 cents. If the CPI-W actually decreases, the minimum wage will not decrease.

The bill also includes an "off-ramp provision" that would allow the governor to choose to pause any scheduled increase (other than the initial $10.50 increase) for one year if certain economic or budgetary conditions are met.

The law also will eliminate the exemption from the paid sick leave law for certain providers of in-home supportive services, effective July 1, 2018, and provide a separate accrual schedule for such employees.