California Enacts $15 Minimum Wage, Increasing Momentum for Action In Other States

Employment Law

The California legislature passed a bill this week to raise the state's minimum wage to $15 by 2022 as New York legislators announced an agreement to increase the minimum wage in New York City to $15 by the end of 2018 and raise the up-state minimum wage to $12.50 by 2020.  While the California legislation is less aggressive than two labor-sponsored ballot measures that were expected to pass this fall, the California and New York actions will increase public pressure on other state legislators to significantly raise their minimum wage rates over the next six years.  Under the California bill, expected to be signed next week, the state's minimum wage will increase from the current $10 to $10.50 on January 1, 2017, then to $11 the following year, increasing annually by $1 until 2022, after which it would be indexed to inflation beginning in 2024.  The California Chamber of Commerce and Restaurant Association warned the pay hike was too much too fast and did not take into account differences between California's urban and rural areas.  In New York, the budget agreement reached this week will increase the state minimum wage in areas north of Westchester by 70 cents per year over the next five years, eventually hitting $12.50 by the end of 2020, though the governor said it would continue to rise toward $15, depending on its economic impact.  Currently, ten states are in the process of gathering signatures, awaiting approval by the Secretary of State, or have a ballot initiative in place this fall to increase their minimum wage rates, and there are nearly 180 minimum wage bills pending in 40 states.  The heightened activity is due to the efforts of groups like the Fight for $15 and the fact that 2016 is an election year.