Home California California’s Minimum Wage Set to $15.50 on January 1, 2023

California’s Minimum Wage Set to $15.50 on January 1, 2023

by ECT

With the written certification by California Department of Finance Director Keely Martin Bosler, the California Minimum Wage is set to increase to $15.50 on January 1, 2023—a 3.5 percent increase.

Due to Senate Bill 3 (SB3), minimum wage increases to $15.50 now applies to all employers, regardless of size of the company. This means all employees will see a minimum wage of at least $15.50.

 

Here is a copy of the letter:

Minimum Wage Increase, Director of Finance Determination and Certification

Labor Code section 1182.12 requires the Director of Finance to annually make a determination and certify to the Governor and the Legislature whether an adjustment for inflation is applied to minimum wage after the minimum wage reaches fifteen dollars ($15) per hour. Pursuant to this section, the minimum wage of $15 per hour was implemented on January 1, 2022 for employers who employ 26 or more employees and scheduled for January 1, 2023 for employers who employ 25 or fewer employees.

Following the implementation of the minimum wage to $15 per hour, Labor Code section 1182.12(c) requires that on or before August 1 of each year, the Director of Finance determines if the minimum wage shall be adjusted for inflation and calculates the increase in minimum wage by the lesser of 3.5 percent or the rate of change, as specified, for the United States Bureau of Labor Statistics non-seasonally adjusted United States Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W).

The Department of Finance calculates the U.S. CPI-W for the 12-month period from July 1, 2021 to June 30, 2022 increased by 7.9 percent compared to the 12-month period from July 1, 2020 to June 30, 2021. Labor Code section 1182.12(c)(3)(B) requires that when the rate of increase in inflation exceeds 7 percent in the first year in which the minimum wage for employers with 26 or more employees is $15 per hour, the minimum wage for employers with 25 or fewer employees must be set to the same amount as for employers with 26 or more employees, effective the following January 1. As a result, pursuant to subdivision (c), Finance has determined that minimum wage shall increase by 3.5 percent to $15.50 per hour and shall be implemented for all employers on January 1, 2023.

Based on the calculations described above, I hereby certify that the minimum wage shall increase by 3.5 percent and the rate shall be $15.50 per hour for all employers effective January 1, 2023.

Please call Susan Wekanda, Principal Program Budget Analyst, at (916) 445-5332, if you have any questions.

KEELY MARTIN BOSLER
Director

cc: Honorable Jim Nielsen, Vice Chair, Senate Budget and Fiscal Review Committee
Honorable Vince Fong, Vice Chair, Assembly Budget Committee
Gabriel Petek, Legislative Analyst (3)
Elisa Wynne, Staff Director, Senate Budget and Fiscal Review Committee
Kirk Feely, Fiscal Director, Senate Republican Fiscal Office
Christopher W. Woods, Senate President pro Tempore’s Office (2)
Christian Griffith, Chief Consultant, Assembly Budget Committee
Joseph Shinstock, Budget Director, Assembly Republican Caucus,
Office of Policy and Budget
Paul Dress, Caucus Co-Chief of Staff, Assembly Republican Leader’s Office
Katja Townsend, Capitol Director, Assembly Republican Leader’s Office
Jason Sisney, Assembly Speaker’s Office (2)
Mark McKenzie, Staff Director, Senate Appropriations Committee
Jay Dickenson, Chief Consultant, Assembly Appropriations Committee


Editors Note – Brief History (2016)

Back in 2016, Governor Edmund G. Brown Jr. joined legislators and labor leaders to announce a landmark agreement that made California the first state in the nation to commit to raising the minimum wage to $15 per hour statewide.

Under the plan, minimum wage will rise to $10.50 per hour on January 1, 2017 for businesses with 25 or more employees, and then rises each year until reaching $15 per hour in 2022. This plan also recognizes the contributions of small businesses – those with fewer than 25 employees – to California’s economy and allows additional time for these employers to phase in the increases. — Full Story

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