Recent California Minimum Wage Increase

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Recent legislation signed by California Governor Jerry Brown calls for an increase in the state minimum wage. The minimum wage, currently at $10.00 an hour, is set to increase to $10.50 effective January 1, 2017. There will be another increase in 2018 to $11.00 and then a $1 a year increase after that until the minimum wage reaches $15.00. Small businesses will have an extra year to reach the $15.00 an hour threshold.

Reasoning

The idea behind increasing the minimum wage is to help low-income earners earn more money. The extra income would allow employees to better afford basic necessities, such as housing and groceries. In addition, increasing workers’ pay is designed to prevent large amounts of people from living in poverty.

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Opinions

There are various opinions regarding the increased rate of pay. Backers of the measure believe that a higher minimum wage will allow employees to have a higher standard of living and additional income for unexpected expenses. At the same time, those in favor feel that the extra money that individuals earn could help boost the economy as people would have discretionary income to spend.

However, not everybody is in favor of the higher pay. Detractors believe that an increased wage will result in companies having to raise prices; cut workers’ hours to avoid losing money; and potentially shipping jobs out of the state (such as in the manufacturing sector) to avoid paying the higher minimum wage.

Conclusion

As a business owner, it can be difficult to assess how the increased minimum wage will ultimately affect the company’s bottom line. If an employer has any questions about the legislation, it can be useful to speak with a business attorney. The lawyer can explain what the advantages and disadvantages are to the increased wage. An attorney can also explore any potential issues that may arise from employees earning more money and how this may eventually affect the organization long-term. Lastly, a lawyer can help the business formulate what the best strategy may be to implement any cost increases to help offset the higher minimum wage.

r.w.

Business Litigation Lawyers in Orange County California