Governor Edmund G. Brown Jr. joined supporters from across the state in Los Angeles this week to sign landmark legislation that makes California the first state in the nation to commit to raising the minimum wage to $15 per hour statewide.
Under the legislation — SB 3 by Senator Mark Leno (D-San Francisco) — the minimum wage will rise to $10.50 per hour on Jan. 1, 2017 for businesses with 26 or more employees, and then rise each year until reaching $15 per hour in 2022. The bill also recognizes the contributions of small businesses — those with 25 or fewer employees — and allows additional time for these employers to phase in the increases.
The legislation increases the minimum wage over time, consistent with economic expansion, while providing safety valves — known as “off-ramps” — to pause wage hikes if negative economic or budgetary conditions emerge. The governor can act by September 1 of each year to pause the next year’s wage increase for one year if there is a forecasted budget deficit (of more than one percent of annual revenue) or poor economic conditions (negative job growth and retail sales).
Once the minimum wage reaches $15 per hour for all businesses, wages could then be increased each year up to 3.5 percent (rounded to the nearest 10 cents) for inflation as measured by the national Consumer Price Index. The new law also phases in sick leave for In-Home Supportive Services workers starting in July 2018.