California Approves First Statewide $15.00 Minimum Wage in the Nation

On April 4, 2016, Governor Brown signed into law an annual, statewide minimum wage increase, which will ultimately result in a $15.00 minimum wage by January 1, 2022. The first increase will occur on January 1, 2017. Thereafter, wage increases will occur on January 1 of each year according to the table below. Smaller businesses of 25 or fewer employees will have an additional year to phase in.

As a general rule, employers are required to provide the most generous benefit offered by applicable local, state or federal law. Employers must therefore check their local ordinances, which may offer a more generous minimum wage or similar wages increasing at a faster pace than the statewide phase-in. For example, if a specific region mandates a $13.00 minimum wage effective January 1, 2018, employers of that region must comply with that regulation, rather than the statewide mandate of $11.00.

This staggered plan for increasing minimum wage does have flexibility built in.  In the event of poor economic conditions, the Governor will have the capability to act by September 1 of each year to “pause” the next year’s wage increase for one year. This flexibility is also written for the possibility of future growth: after the $15.00 wage goes into effect for all employers, wages could be increased each year for inflation as measured by the Consumer Price Index, capping out at an additional 3.5%.