Legislature considers increase in minimum wage

By CMTA Staff

Capitol Update, June 21, 2013

Next week, on June 26th, the Senate Labor and Employment Committee will consider a bill to increase the state’s minimum wage by $2 an hour starting in 2014. As recently amended, AB 10 by Assemblymember Luis Alejo (D-Salinas) proposes to incrementally increase the minimum wage to $10 an hour by 2018.  Previous language would have increased the minimum wage to $9.25 an hour and tied subsequent annual increases to the rate of inflation. This provision was struck from the bill and replaced with the $10 an hour cap in order to facilitate its continued movement through the legislative process. CMTA and others remain opposed to the bill.

An increase in the minimum wage not only raises the pay for hourly employees, it also increases salaried employees’ compensation. In order for employees to qualify as “exempt” under any of the six exemptions in California, they must meet the salary-basis test, which is two times the monthly minimum wage. So, if AB 10 is implemented, employers will experience cost increases for both their hourly and salaried employees.

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