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Bryant Whitten, LLP

New California law could result in wage disputes due to ambiguity

In one of the most populous and expensive states to live, many celebrate the deal struck recently between lawmakers and labor unions to raise the minimum wage to $15 per hour by 2022. However, there remain many questions about how this decision will affect the economy in California, especially with regard to small businesses and the implementation of the new law. The language of the deal leaves much room for interpretation and could result in wage disputes as the law is implemented over the next few years. A recent news article outlines some of the concerns that leading economists have and elucidates the challenges of applying this new law.

While raising the minimum wage will undoubtedly benefit a large portion of California's work force, it could present problems for small business owners who simply cannot afford to pay the increased rate. This could result in increased unemployment or require that employers cut the number of hours or days their business is open. Some economists view this raise as an experiment that may affect businesses and city economies in ways that they are unable to forecast.

Also, there is a great deal of ambiguity in how this wage increase can fluctuate. As an example, the governor could "pause" an increase for a year if the economy weakens or if the state's budget is not on target. Such factors could result in confusion for employers and employees and cause wage disputes if employers are not up-to-date on the most current regulations. 

During this time of transition, California workers in minimum wage jobs may be involved in wage disputes as this new law is implemented. It is important for workers in minimum wage jobs to be educated on the most recent changes and policies. Workers may benefit from advice provided by a California attorney who is educated in the most recent changes and issues facing minimum wage workers.

Source: The New York Times, "$15-an-Hour Minimum Wage in California? Plan Has Some Worried", Noam Scheiber and Ian Lovett, March 28, 2016

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