HR Management & Compliance

Effort to push California minimum wage to $15 reported

Most California employers will see the state’s minimum wage reach $15 an hour by 2022 if reports of a deal in the state legislature materialize as expected.

Reports in the Los Angeles Times and The Sacramento Bee on March 27 tell of a tentative deal between state lawmakers and union leaders that would phase in the wage hike. Currently, the state’s minimum wage stands at $10 an hour. (The federal minimum wage is $7.25 an hour.) The outlets reported that businesses with fewer than 25 employees would have an extra year to reach the $15 level.

Mark I. Schickman, an attorney with Freeland Cooper & Foreman LLP in San Francisco, said the deal is extremely likely to pass the legislature and gain Governor Jerry Brown’s support. On March 28, the governor’s office issued a statement that Brown would join “a number of other leaders” to discuss the “landmark deal” to raise the state’s minimum wage. The Times reported that lawmakers could vote on the proposal within a couple of weeks.

The Bee reported that under the proposal, a sitting governor could temporarily stop the phased-in increases in case of a recession. Also, after the $15 level is reached, future increases would be linked to inflation.

Schickman said that the governor’s ability to delay one of the phased-in raises is a key part of the bill and that having a cost-of-living escalator built in to the bill is a “huge feature” since once the $15 level is reached, the minimum wage could rise based on inflation without additional legislation.

If the deal materializes, it could replace efforts to put a minimum wage hike on the November ballot. A proposal that would raise the minimum wage to $15 an hour by 2021 has qualified to be on the ballot. “The word is that . . . proponents are going to take that off the ballot if [the bill] passes,” Schickman said, adding that he expects Brown to support the bill even though the governor has been “a bit more centrist than the legislature” lately and vetoed some employment bills in the last session.

Schickman said he expects California cities that have passed minimum wages that are higher than the state’s to come under pressure to raise their thresholds again in response to the state action. According to Schickman, employers can expect a new statewide minimum wage to drive up other wages as well since employers paying entry-level workers $15 an hour will want to pay more to employees with more experience and skills.

Schickman said some employers see the higher minimum wage as a necessity because some places in California, such as the Bay Area, are too expensive for people making minimum wage to live within an hour of the city.