Governor approves minimum wage increase

By CMTA Staff

Capitol Update, Sept. 26, 2013

As expected, Governor Jerry Brown signed legislation this week to increase the state’s minimum wage to $10-an-hour by 2016. AB 10 (Luis Alejo, D-Salinas) requires a $1 increase in the minimum wage by July 2014, followed by another $1 increase almost two years later in January 2016. This represents a 25 percent increase in labor costs over the next three years.

Not only will this increase effect hourly wages, it also raises compensation for salaried employees – in order for an employee to qualify as “exempt” under any of the state’s six exemption categories, they must meet the salary-basis test, which is two times the monthly minimum wage.

CMTA and others strongly opposed this bill because the proposed increase far exceeded any reasonably expected rate of inflation and failed to consider the additional costs manufacturers will face in the near future, including higher energy costs, regulatory fees and the costs related to the implementation of the Affordable Care Act.

CMTA supports regulatory and economic policies that allow California to become a better place to grow middle-class manufacturing jobs that do not rely on minimum wage protections – such as the sales tax exemption for the purchase of manufacturing equipment that the Governor and Legislature approved earlier this year. We are hopeful that raising the minimum wage in this manner will not unduly discourage the growth and expansion that such policies can bring.

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