Senate BillNo. 3


Introduced by Senators Leno and Leyva

(Principal coauthor: Senator De León)

December 1, 2014


An act to amend Section 1182.12 of the Labor Code, relating to wages.

LEGISLATIVE COUNSEL’S DIGEST

SB 3, as introduced, Leno. Minimum wage: adjustment.

Existing law requires that, on and after July 1, 2014, the minimum wage for all industries be not less than $9 per hour. Existing law further increases the minimum wage, on and after January 1, 2016, to not less than $10 per hour.

This bill would increase the minimum wage, on and after January 1, 2016, to not less than $11 per hour, on and after July 1, 2017, to not less than $13 per hour. The bill would require the annual automatic adjustment of the minimum wage, commencing January 1, 2019, to maintain employee purchasing power diminished by the rate of inflation during the previous year. The adjustment would be calculated using the California Consumer Price Index, as specified. The bill would prohibit the Industrial Welfare Commission (IWC) from adjusting the minimum wage downward and from adjusting the minimum wage if the average percentage of inflation for the previous year was negative. The bill would require the IWC to publicize the automatically adjusted minimum wage.

The bill would provide that its provisions not be construed to preclude an increase in the minimum wage by the IWC to an amount greater than the formula would provide, to result in a reduction in the minimum wage, or to preclude or supersede an increase of the minimum wage that is greater than the state minimum wage by any local government or tribal government.

The bill would apply to all industries, including public and private employment.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 1182.12 of the Labor Code is amended
2to read:

3

1182.12.  

begin insert(a)end insertbegin insertend insert Notwithstanding any other provision of this part,
4on and after July 1, 2014, the minimum wage for all industries
5shall be not less than nine dollars ($9) per hour,begin delete andend delete on and after
6January 1, 2016, the minimum wage for all industries shall be not
7less thanbegin delete ten dollars ($10) perend deletebegin insert eleven dollars ($11) per hour, and
8on and after July 1, 2017, the minimum wage for all industries
9shall be not less than thirteen dollars ($13) perend insert
hour.

begin insert

10(b) (1) Except as provided in paragraph (3), the minimum wage
11shall be automatically adjusted on January 1 of each year,
12commencing on January 1, 2019, to maintain employee purchasing
13power diminished by the rate of inflation that occurred during the
14previous year.

end insert
begin insert

15(2) The minimum wage adjustment shall be made by multiplying
16the minimum wage in effect on December 31 of the previous year
17by the percentage rate of inflation that occurred during that year,
18and by adding the product to the wage in effect during that year.
19The resulting total shall be rounded off to the nearest five cents
20($0.05). The Industrial Welfare Commission shall publicize the
21automatically adjusted minimum wage.

end insert
begin insert

22(3) The Industrial Welfare Commission shall not adjust the
23minimum wage pursuant to this subdivision if the average
24percentage of inflation for the previous year was negative.

end insert
begin insert

25(4) For purposes of this subdivision:

end insert
begin insert

26(A) “Percentage rate of inflation” means the percentage rate
27of inflation specified in the California Consumer Price Index for
28All Urban Consumers, as published by the Department of Industrial
29Relations, Office of Policy, Research and Legislation, or its
30successor index.

end insert
begin insert

P3    1(B) “Previous year” means the 12-month period that ends on
2August 31 of the calendar year prior to the adjustment.

end insert
begin insert

3(c) The Industrial Welfare Commission shall not reduce the
4minimum wage prescribed by this section.

end insert
begin insert

5(d) This section shall not be construed to preclude an increase
6of the minimum wage by the Industrial Welfare Commission to an
7amount that is greater than the rate calculated pursuant to
8subdivision (b) or to preclude or supersede an increase of the
9minimum wage that is greater than the state minimum wage by
10any local government or tribal government.

end insert
begin insert

11(e) This section applies to all industries, including public and
12private employment.

end insert


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