Last night — on the eve of the last day for the California Legislature to pass bills before interim recess in this 2013-2014 regular session — the Legislature sent to the Governor for signature AB 10, which, over time, will raise the minimum wage in California from $8.00 per hour to $10.00 per hour.
The Governor has already publicly announced that he will sign the bill, stating that “the minimum wage has not kept pace with rising costs” and will help families “struggling in this harsh economy.” Assembly Speaker John Pérez and Senate President Pro Tempore Darryl Steinberg also supported the bill, claiming the money will be put back into the economy through spending and help ensure economic recovery and job growth. California first set a minimum wage in 1916. The California Chamber of Commerce opposed the measure because the increase exceeds a 3.5% rate of inflation and only adds to the costs — such as the Affordable Care Act, Proposition 30 taxes, and CA Department of Industrial Relations employment assessments — that California employers are already facing.
The bill will raise the minimum wage in two one-dollar increments, from the current $8 per hour rate to $9 per hour effective July 1, 2014. Then to $10 per hour effective January 1, 2016.
Workplace Solution: Employers should be aware this legislation is coming so they can respond to employee inquiries, know actual effective dates of each increase, and prepare to modify payroll systems and wage notices and forms to ensure necessary changes are made. This development also makes still more significant the recent judicial interpretations [see here and here] that require separate payment of minimum wage for the non-productive work performed by workers compensated on a piece-rate or commission basis.