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California Minimum Wage Scheduled to Increase to $15 Per Hour by 2022

On April 4, 2016, Governor Jerry Brown signed a bill into law, setting forth a schedule that will gradually raise California’s minimum wage each year, until it reaches $15.00/hour.  The increases begin on January 1, 2017.

For employers with 26 or more employees, California’s minimum wage will increase as follows, except when scheduled increases are temporarily suspended by the Governor, based on a determination that economic conditions cannot support a minimum wage increase:

  • $10.50/hour on January 1, 2017;
  • $11.00/hour on January 1, 2018;
  • $12.00/hour on January 1, 2019;
  • $13.00/hour on January 1, 2020;
  • $14.00/hour on January 1, 2021;
  • $15.00/hour on January 1, 2022;
  • On January 1, 2023 and every January 1 thereafter, minimum wage will increase based on an inflation-index.

For employers with fewer than 26 employees, California’s minimum wage will increase to $10.50/hour on January 1, 2018, $11.00/hour on January 1, 2019, and it will increase $1/hour on January 1 every year thereafter through 2023, except when scheduled increases are temporarily suspended by the Governor.  Beginning 2024, minimum wage will increase based on an inflation-index. 

In the event the Governor determines economic conditions cannot support a minimum wage increase for the following year, a temporary suspension of the scheduled increase shall be announced on September 1.  If a scheduled increase is suspended for a given year, all subsequent scheduled increases shall also be postponed by a year.  The Governor may only temporarily suspend the scheduled minimum wage increases two times.

In addition to this new California-wide requirement, employers must also comply with any city or county minimum wage ordinances, including the ordinance enacted by the City of Los Angeles, which becomes effective on July 1, 2016.

With each increase in the minimum wage, employers must ensure the salaries of all exempt employees are at least twice the state’s minimum wage.

Prepared by Jennifer Branch (phone: 858-345-5073, email: jbranch@albblaw.com).  For information about the Los Angeles City Ordinance, California’s minimum wage, or any other employment-related questions,  please contact Ms. Branch or any of the employment attorneys at Andrews ∙ Lagasse ∙ Branch & Bell llp.

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