The minimum wage could again be headed north. This time to an $18 dollar minimum wage — California business owners may be asked to face it in the coming years as another hike in a recent series of them.
Because of its steady rise, what minimum wage in California has done is set a precedent for more increases, which was ultimately meant to benefit employees. As a business owner myself, I value and take pride in paying my employees well. But the reality of a forced, broadly applied minimum wage that keeps increasing is all too harsh for many businesses who may not be able to afford it — many of whom are just beginning to adjust to the current $15 per hour rate, which took effect on January 1st of this year for businesses with 26 or more employers.
For a bit of context, this new wave of California minimum wage history began in 2016, when then-Governor Jerry Brown signed California Senate Bill 3 into law providing annual wage increases until a $15 minimum was reached in 2022 for businesses with 26 or more employers. Those employers with 25 or fewer employees have until January of 2023 to comply with the $15 minimum wage. While many small businesses still have another year to prepare, more legislation could be coming soon to the tune of a $3 per hour increase.
Inspired in large part by the California minimum wage increase in 2022, a new proposal has been put forth which could boost the rate to $18 per hour. Called “The Living Wage Act of 2022” (Initiative Number 21-0043), it was filed with the California Attorney General in December by Joe Sandberg, a wealthy anti-poverty activist. He was a major force behind the new minimum wage in California. 2022 (by County and Statewide standards) has already been hard for many business owners, but this raise was just the start for him.
“We were a leader in pushing for a $15 minimum wage, but now we have to move the ball forward and farther. It’s overdue for $18,” Sandberg was quoted as saying in the LA Times.
Notably, the way in which this would be enforced is through an entirely different route than the previous increase to $15, brought about under the aforementioned Senate Bill 3 — it was voted on by the state legislature and signed by the Governor. However, the new increase to $18 is being proposed as a statewide proposition. That means the voters of California — not our elected legislators in Sacramento — would determine whether the proposal becomes law. While this, in theory, sounds good — employers are already feeling the cost and pressure of inflation rates and a strained supply chain, and labor shortages.
In order to be placed before voters, Sandberg and his supporters would have to garner 623,212 valid signatures prior to June 30. If approved, businesses with 26 or more employees would be required to raise their base pay by a dollar per year (beginning in 2023) and provide $18 an hour by January 1, 2025. At the same time, smaller businesses with 25 or fewer employees would begin to transition in 2024 and be required to provide $18 an hour by 2026. Beginning in 2027, all employers would see their minimum wage tied to changes in the Consumer Price Index.
Increases to minimum wage under Initiative 21-0043
|Year||Employers of 26 or more workers||Employers of 25 or less workers|
|2027||$18.00 + CPI-W adjustment||$18.00 + CPI-W adjustment|
It remains to be seen how debates will unfold on the issue in the coming months. It’s safe to say there will be significant debate and plenty of support and opposition. When the most recent SB 3 was proposed, dozens of advocacy groups added their names as supporters and opponents.
The legislation was co-sponsored by the Western Center on Law and Poverty; United Food and Commercial Workers; and Service Employees International Union. Among the dozens of supporters were labor and workers advocacy groups. However, it also garnered significant support from several cities. Among them: Los Angeles, Long Beach, Mountain View, San Jose, Sunnyvale, the City and County of San Francisco, and Napa County.
Opponents to SB 3 included the California Chamber of Commerce — as well as the local Greater Fresno Area Chamber of Commerce and Bakersfield Chamber — and dozens of other business advocacy groups. These included tax advocacy associations and associations representing agricultural production and processing. The very businesses upon which the foundation of the valley’s economy has been built.
Opponents generally argued that SB 3 was too large of a wage increase in too short of a time and threatened to overwhelm California’s small businesses. At the same time, supporters advocated the need for wages that more closely reflected the costs of living in California.
It is likely that many of the same supporters, opponents, and arguments will re-emerge as the debate unfolds for The Living Wage Act of 2022. If you have any opinions you wish to share about the proposed proposition, you can easily and quickly provide them through an online portal of the California Attorney General’s website by clicking here.
If you’re seeking a dedicated minimum wage attorney for a business in California, it is recommended you consult a lawyer who is well versed in the legal implications of recent, current, and future legislation. Proper Defense Civil Division Founder Justin Vecchiarelli focuses his practice on such employment and labor laws. His extensive experience has helped businesses of all sizes make sure they are in compliance with all wage and related employment laws (and continue to stay in compliance). At Proper Defense, we are uniquely qualified to help businesses navigate the continuously updated requirements of local, state, and federal employment law.
PROPER DEFENSE PROVIDES PROACTIVE COUNSEL FOR THE FUTURE OF YOUR BUSINESS
Running a profitable business while preparing your business for upcoming changes is no small feat. But being unprepared can come at a steep cost – which can be avoided through a proactive response. It is paramount to have sound legal advice BEFORE expensive fines and litigation force your hand. We don’t believe in only providing representation when a lawsuit is filed. We believe in prevention and are ready to help ensure you’re in compliance now and in perpetuity.
For a true advocate that you can trust, in a judgment-free zone, contact Proper Defense Law Corporation today. For a FREE consultation in the Fresno area, call (559) 825-3800. You can reach us at our Beverly Hills location by calling (424) 284-4066. You can also schedule an appointment online on our Contact Us page. It gets better with Proper Defense, we promise
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