Bad News: Legislature Passes Measure To Increase Minimum Wage; Good News: Governor Likely to Veto
Yesterday, the California Legislature voted to increase the state’s minimum wage by $1.00 an hour over the next two years. Currently, the state’s minimum wage is set at $6.75 per hour, but the legislation would increase this to $7.25 per hour beginning in July 2006 and increased again to $7.75 in July 2007. The bill also establishes automatic “indexing” in order to continually adjust the minimum wage each year to account for inflation. The Los Angeles Times reports that the Governor attempted to compromise with state Democrats by offering to allow the $1.00 increase to pass if the automatic indexing was taken out of the measure. The governor’s office stated that its biggest concern “is this indexing component, because it takes away the government’s ability to be flexible to the state’s economic indicators.” Also, the governor made his offer contingent on the legislature broadening the exempt classification of employee to include more employees and to exempt employees who work four 10-hour days instead of five eight-hour days from overtime.