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City Employees Largely Exempted from California’s New Minimum Wage Law

Governor Signed $15 Minimum Wage amid Looming Ballot Measures

April 6, 2016
The nation’s eyes were on California Monday when Gov. Jerry Brown signed legislation to raise California’s minimum wage to $15 an hour by the year 2022.
 
Beginning in 2023, the minimum wage will be annually adjusted using the California Consumer Pricing index. The momentum to come to a legislative agreement on the minimum wage mounted once ballot measures to raise it qualified. By in large cities wage policies for employees under the new law will remain unchanged.

Led by organized labor and greenlit by Assembly and Senate leadership, SB 3 (Leno) fast tracked, moving out of the Assembly Appropriations Committee, taken up on the Assembly floor and immediately transmitted to the Senate floor for a vote — all in a single day.
 
Some lawmakers cried foul, sighting the lack of process. Assembly Member Susan Talamantes Eggman (D-Stockton), who chairs the Assembly Local Government Committee, sited a strong contrast while speaking on the Assembly floor, between SB 3 and the water bond package passed in 2014.
 
“The process on how we got here just doesn’t feel right. ... When we did the water bond and we took our time and we traveled up and down the state and we listened to our constituents, we were able to craft something that nearly this entire body could get behind … that was a good process. … What is the rush to do this right now? We are elected by our districts to come here to be deliberate.”
 
This year, two minimum wage ballot initiatives heavily pushed by SEIU and other organized labor groups qualified for the November 2016 ballot. With polls showing a 65 percent approval rating for a $15 minimum wage, the Governor struck a deal with organized labor to craft a measure that would be seemingly less harmful to California employers than what the voters will consider in November. Most notably SB 3 allows for the Governor to temporarily suspend the stepped increases in times of severe economic downturn. In exchange, the proponents have agreed to pull their measures form the ballot.  
 
Local Governments Can Still Regulate Under SB 3
 
City employees who are unionized and provide health benefits through a collective bargaining agreement are exempt from SB 3 as long as they continue to be compensated not less than 30 percent more than the state’s minimum wage and are provided ongoing health benefits as part of their collective bargaining agreement. Moreover, the bill specifically exempts local government employees who are recipients of a retirement allowance (PERS, Pension, etc.).
 
It is, however, important to note that if a city has enacted a minimum wage ordinance that is below the new state minimum, the city will automatically be swept into state law. This was the main objection from Republicans and even some moderate Democrats who believe that minimum wage should be a regional issue. City councils are still free to pass local minimum wage ordinances that are higher than the state bill.


 
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