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Au
gust 1, 2024
Honorable Gavin Newsom
Governor
Hon
orable Mike McGuire
Senate President pro Tempore
Honorable Brian W. Jones
Senate Republican Leader
Honorable Scott Weiner, Chair
Senate Budget and Fiscal Review
Committee
Honorable Anna Caballero, Chair
Senate Appropriations Committee
Hon
orable Robert Rivas
Speaker of the Assembly
Hon
orable James Gallagher
Assembly Republican Leader
Hon
orable Jesse Gabriel, Chair
Assembly Budget Committee
Hon
orable Buffy Wicks, Chair
Assembly Appropriations Committee
Mi
nimum Wage Increase, Director of Finance Determination and Certification Labo
r 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 the minimum wage after the minimum wage reaches $15.00 per hour. Pursuant to this section, the minimum wage of $15.00 per hour was implemented on January 1, 2022 for employers who employ 26 or more employees and on January 1, 2023 for employers who employ 25 or fewer employees.
Lab
or 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 $15.00 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. Pursuant to this section, the minimum wage of $15.50 per hour was implemented on January 1, 2023, for all employers.
Foll
owing the implementation of the minimum wage to $15.00 per hour, Labor Code section 1182.12(c) requires that on or before August 1 of each year, the Director of Finance shall calculate the adjusted minimum wage to be 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). Pursuant to this section, the minimum wage of $16.00 per hour was implemented on January 1, 2024, for all employers. -2-
This year, the Department of Finance calculates the average U.S. CPI-W for the 12-month period from July 1, 2023 to June 30, 2024 increased by 3.18 percent compared to the 12-month period from July 1, 2022 to June 30, 2023. As a result, pursuant to section 1182.12(c), Finance has determined that the minimum wage shall increase by 3.18 percent to $16.50 per hour and shall be implemented for all employers on January 1, 2025.
Based
on the calculations described above, I hereby certify that the minimum wage increase shall include an inflation adjustment of 3.18 percent for all employers effective January 1, 2025.
Ple
ase call Susan Wekanda, Principal Program Budget Analyst, at (916) 445-5332, if you have any questions.
JOE
STEPHENSHAW
Director
cc: H
onorable Roger W. Niello, Vice-Chair, Senate Budget and Fiscal Review Committee
Honorable Heath Flora, 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, Fiscal Director, Assembly Republican Caucus, Office of Policy and Budget
Paul Dress, Caucus 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