Tracking the progress of the 2006 minimum wage legislation.
September 12, 2006 - Governor Signs Minimum Wage Increase
Governor Schwarzenegger signed AB1835, making the California minimum wage one of the highest in the country. The hourly minimum will go to $7.50 effective January 1, 2007, and there will be corresponding increases in the minimum salary that must be paid to exempt employees. These changes will require new state minimum wage posters and revisions to the wage orders that must be posted by California employers.
The second increase contained in the bill will take the minimum to $8.00 per hour in 2008 and again impact exempt minimum salaries.
August 31, 2006 - Minimum Wage Bill Passes in Assembly - To Governor for Signature
The State Assembly took final action today on the minimum wage bill, AB1835, which now goes to Governor Schwarzenegger for signature. The final version includes the two-step minimum wage increase, plus additional provisions ordering comparable increases in the meal and lodging credits and requiring the creation and posting of revised Wage Orders.
Upon approval by the Governor, which is expected, the first increase to $7.50 per hour will be effective January 1, 2007 and the second increase to $8.00 per hour will be effective January 1, 2008.
The increase also may affect some of California's exempt executive, administrative and professional employees whose minimum salary requirements are tied to the state minimum wage. For these exempt employees, the minimum salary will increase to $2,600 per month ($31,200 per year) on January 1, 2007 and to $2,773.33 per month ($33,280 per year) effective January 1, 2008.
New minimum wage posters and wage orders will have to be posted by January 1, 2007. These will be available on a timely basis from CalBizCentral.
August 30, 2006 - Minimum Wage Passed in State Senate
The Senate today adopted the minimum wage increase previously agreed upon by the Governor and legislative leaders. The Senate bill contains amendments that do not affect the minimum wage package, which now must be approved by the Assembly, by tomorrow at the latest. When approved, the Governor is expected to sign the measure into law.
August 22, 2006 - Minimum Wage Deal Announced
Legislative leaders and Governor Schwarzenegger have apparently reached a deal increasing the California minimum wage by 75 cents effective January 1, 2007 and another 50 cents effective January 1, 2008. The total increase of $1.25 over two years will establish the highest state minimum wage in the country and will far exceed the federal minimum. The change will impact low wage non-exempt workers and will also raise the minimum salary required to meet the California standards for exempt employee status.
The deal still must be approved by both houses of the Legislature, where Democrat lawmakers will have to give up their push to include indexed annual increases in the minimum wage. Some Republican lawmakers may also object to the size of the increase.
August 7, 2006 - Wage Board Deadlocked
The 13-member Wage Board appointed by the Industrial Welfare Commission (IWC) failed to agree on a recommendation regarding the state minimum wage at its public meeting on August 4, 2006. It also remained at odds on the issue of indexing. The California Labor Federation proposed an increase to $9.78 per hour, a 45% increase over the current minimum. The Wage Board will report the outcome of its deliberations to the IWC at the Commission's August 24, 2006 meeting.
August 4, 2006 - Perata Proposal for Compromise Legislation
Senator Don Perata, the President Pro Tem of the state Senate, said yesterday that he would be willing to drop the idea of indexing the state minimum wage if the Governor would support a $1.50 increase. The Governor has vetoed minimum wage legislation in the past because it contained indexing provisions, and has indicated he would do so again. The Governor is currently supporting a proposed $1.00 increase in the state minimum wage without indexing, which is being considered by the Industrial Welfare Commission (IWC). The Perata proposal came on the same day the U.S. Senate rejected an increase in the federal minimum wage. The proposal would have resulted in an increase of the current $5.15 federal minimum by $2.10 over three years. Senate Democrats rejected the Republican-proposed increase because it was tied to federal estate tax relief for large estates.
July 5, 2006 - Industrial Welfare Commission Convenes to Consider Proposals
The Industrial Welfare Commission (IWC) took initial action on petitions filed by Governor Schwarzenegger, Senator Maldonado and the California Labor Federation to review the adequacy of the California minimum wage, which currently stands at $6.75 per hour. The Governor has proposed that a one-dollar increase be implemented in two phases of 50 cents each over a 9-month period, but opposes indexing future increases. Senator Maldonado’s petition suggests a one-dollar increase implemented in two phases of 50 cents each effective on September 1, 2006 and July 1, 2007, with no subsequent indexing. The California Labor Federation petition seeks an increase in the minimum wage and future index-driven increases.
The IWC appointed a Wage Board to consider and make recommendations to the IWC regarding the adequacy of the state minimum wage. The Wage Board consists of an equal number of employer and labor representatives and a non-voting chairperson. It's charged with considering:
- The adequacy of the current minimum wage of $6.75 per hour and whether the state minimum wage should be increased
- If it's inadequate, how much the minimum wage should increase and the timing of such an increase or increases
- Whether the minimum wage should be indexed
The Wage Board will hold a public meeting in Sacramento at 10:00 a.m. on August 4, 2006 at the Department of Health Services Auditorium, 1500 Capitol Avenue. While the meeting is open to the public, no oral presentations will be permitted. Written testimony or other evidence may be submitted no later than July 20, 2006 at 5:00 p.m. Instructions on how to submit written testimony or evidence can be found on the IWC Web site at:
www.dir.ca.gov/IWC/IWCMeeting_08042006.html
Two bills to raise the minimum wage and automatically index future increases passed policy committees in both houses of the Legislature on June 21, 2006. AB 1835 and SB 1162 would increase the minimum wage to $7.25 on July 1, 2007 and to $7.75 on July 1, 2008, with annual indexing raising the minimum wage every year thereafter. The Governor has previously vetoed minimum wage legislation that included indexing.