California’s New Minimum Wage Hits $15.00/Hour in 2022

Recently, the California legislature and Governor Jerry Brown signed a new law that raises the minimum wage to $15.00 per hour.  However, in order to alleviate the financial impact that raising the minimum wage will have on employers, the minimum wage increases will be gradual with the minimum wage hitting $15.00 in the year 2022.

The minimum wage in California for the year 2016, is $10.00 per hour.  This rate increases to $10.50 on in January 2017, then to $11.00 on January 1, 2018.  Starting on January 1, 2019, the minimum wage will continue to increase by $1.00 per hour until it hits the $15.00 per hour rate in 2022.  The California legislature did provide employers with 25 or fewer employers an extra year to reach the $15.00 per hour threshold.  Accordingly, these small business employers will be required to pay their employees $15.00 an hour beginning in 2023.

An interesting caveat to this law is that the pay hikes could be halted if certain conditions occur.  Namely, if there is a forecasted budget of more than 1 percent of annual revenue or due to poor economic condition, such as declines in jobs and retail sales.  However, it is unclear as to how low these factors would have to fall before the wage hikes are temporarily halted.

With the changes to the minimum wage law, it is important that employees be aware that they receive their yearly annual increases in pay for each year beginning in 2017.  With all the press coverage this law has engendered, it is likely that most employers are well aware of the coming increases.

Hopefully business will be able absorb the increase in wages without having to layoff employees.  If you are terminated from employment, you are only permitted to bring a lawsuit if the firing was illegal.  For example, if you were terminated because your boss did not like because of your race, religion, gender, sexual orientation or national origin.  In those instances, you would have viable action for wrongful termination because you cannot be terminated due to one of those reasons.  However, if you employer cannot afford to pay you your salary and has not choice, but to lay you off, there is no basis for a lawsuit.

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