Erick Becker
Governor Brown will be signing legislation that raises the California minimum wage in two steps to $10 an hour, which will be highest in the nation. The first increase will occur on July 1, 2014, when the minimum wage will increase by one dollar to $9 an hour. The second one dollar increase is slated for January 1, 2016.
Previous versions of the legislation (AB 10) would have automatically raised the minimum wage each year thereafter based on the rate of inflation, but the author amended the bill in return for larger immediate increases.
Employers need to start planning to absorb the impact of these increases on their labor costs and their overall compensation strategy. In particular, the unprecedented size of the increases will result in wage compression issues across all levels of the hourly workforce, which will have to be addressed and managed to avoid employee relations problems.
