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Is a minimum wage hike on the way?

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in Compensation and Benefits,Human Resources

Q. Is it true that the California state minimum wage is increasing soon?

A. No, but it might. On May 30, the California Assem­­bly passed A.B. 10, which aims to increase the state’s minimum wage incrementally over a three-year period to $9.25 per hour by 2016. California’s current minimum wage is $8 per hour. It was last increased in 2008 by 50 cents.

The measure, which now passes to the state senate for consideration, would increase the minimum wage to $8.25 by January 2014, $8.75 by January 2015 and $9.25 by January 2016.

It would also allow California’s minimum wage to be adjusted annually, based on the rate of inflation, beginning in 2017.

Some California cities have already raised the minimum wage that employees in those cities receive. For example, San Jose’s new minimum wage came into effect in March 2013. Last January, San Francisco’s minimum wage increased to $10.55 per hour, making it the highest minimum wage in the country.

My colleague Betsy Johnson, managing shareholder in the Los Angeles office of Ogletree Deakins, says, “Raising the minimum wage on a statewide basis is likely to have a chilling effect on California’s fragile economic recovery. The increases in the minimum wage will discourage those employers that cannot pass the increased payroll costs through to customers from hiring additional or inexperienced employees.”

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