$15 per Hour Minimum Wage Signed into Law

A deal between state lawmakers and the governor to raise California’s minimum wage to $15 an hour by 2022 was signed into law by Governor Jerry Brown on April 4. 

Under the legislation, Senate Bill 3, Leno, et al., D-San Francisco, wages would rise to $10.50 in 2017, to $11 an hour in 2018, and thereafter increase one dollar per year till 2022. Businesses with 25 employees or less would have an extra year to comply. After reaching $15, the minimum wage would be scheduled to rise with inflation. Governors will be permitted to postpone an increase up to two times if the economy falters. 

Be aware that the minimum wage increase may also impact “exempt” employees. Employees who meet certain qualifications can be “exempt” from the laws related to overtime pay, minimum wage, rest breaks, and meal periods. Generally, the minimum compensation for exempt employees is twice the minimum wage based upon 40-hour workweek. This means a small business owner - 25 or fewer employees - must pay an exempt employee at least $840 a week regardless of the number of hours worked beginning 2018 and $1,200 a week regardless of the number of hours worked beginning 2023. 

The deal was made to prevent the increase happening via a union-backed ballot initiative that contained a more aggressive implementation schedule and no ability for future governors to postpone the increase.