Amended in Senate May 27, 2014

Amended in Senate March 18, 2014

Senate Bill No. 935

Introduced by Senator Leno

(Coauthors: Senators Steinberg and begin delete de León end delete begin insert  De end insert begin insert  León end insert )

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(Coauthor: Assembly Member Ting)

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February 3, 2014

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

LEGISLATIVE COUNSEL’S DIGEST

SB 935, as amended, Leno. Minimum wage: annual 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, 2015, to not less than $11 per hour, on and after January 1, 2016, to not less than $12 per hour, and on and after January 1, 2017, to not less than $13 per hour. The bill would require the automatic adjustment of the minimum wage annually thereafter, 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 reducing the minimum wage 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 the IWC from increasing the minimum wage to an amount greater than the calculation would provide 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:

SECTION 1.  

Section 1182.12 of the Labor Code is amended
to read:

1182.12.  

(a) Notwithstanding any other provision of this part,
on and after January 1, 2015, the minimum wage for all industries
shall be not less than eleven dollars ($11) per hour, on and after
January 1, 2016, the minimum wage for all industries shall be not
less than twelve dollars ($12) per hour, and on and after January
1, 2017, the minimum wage for all industries shall be not less than
thirteen dollars ($13) per hour.

(b) (1) Except as provided in paragraph (3), the minimum wage
shall be automatically adjusted on January 1 of each year,
commencing on January 1, 2018, to maintain employee purchasing
power diminished by the rate of inflation that occurred during the
previous year.

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

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

(4) For purposes of this subdivision:

(A) “Percentage rate of inflation” means the percentage rate of
inflation specified in the California Consumer Price Index for All
Urban Consumers, as published by the Department of Industrial
Relations, begin delete Division of Labor Statistics and Research, end delete begin insert Office of
Policy, Research and Legislation end insert or its successor index.

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

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

(d) This section shall not be construed to preclude an increase
of the minimum wage by the Industrial Welfare Commission to
an amount that is greater than the rate calculated pursuant to
subdivision (b) 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.

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