Minimum wage will increase to $10.50 an hour next year in California and gradually increase to $15 in the years to come. The decision follows a long debate between a Democratic governor and the state’s most powerful unions, and puts California at the forefront of what could become a national movement.
The Deal
On Jan. 1, 2017, California’s minimum wage will increase from $10 to $10.50, with a 50-cent increase in 2018 and then $1 per year through 2022. However, small businesses (those with 25 or fewer employees) will have an extra year to comply, delaying workers from receiving the $15 hourly wage until 2023.
The proposal extends beyond minimum wage, including the addition of up to three paid sick days for government employees who provide at-home care to the disabled. However, the timing of these benefits is subject to economic conditions.
California’s efforts to increase minimum wage sets a benchmark for all other states. Sources say that the state’s legislature could vote on the compromise as early as the end of next week. Some states, including New York, already have taken the movement into consideration for their own workforce.
Seattle Set Precedent
In 2014, Seattle became the first city to adopt the nation’s highest minimum wage when it raised employees’ pay to $15 an hour via Ordinance 124490.
Seattle’s plan was to give companies with no more than 500 employees seven years to implement the new wages; larger companies would get three years.
The “fight for $15” has just begun and though it may not affect your area yet, it is possible the passing of California’s deal could cause a ripple effect nationwide. Employers might consider preparing now. Ensuring your payroll provider is aware and nimble enough to change quickly can help you remain compliant.
