Under the onset of inflation, California’s minimum wage is expected to rise to $ 15.50

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Under the onset of inflation, California's minimum wage is expected to rise to $ 15.50

That law requires an automatic 50-cent-per-hour increase above California’s prevailing minimum wage levels – already the highest any state requires for larger companies – whenever the U.S. consumer price index rises more than 7% from year to year. That means the statewide minimum wage for companies employing 26 or more workers, and those with 25 or fewer workers, will both go to $15.50 in the new year. Without an inflation trigger, the minimum wage for smaller companies was due to have topped out at $15 in January, catching up with the level now required at larger firms.

Other highlights of Newsom’s inflation package include $2.7 billion in emergency rental assistance for low-income tenants and $1.4 billion to help utility customers pay overdue bills. The California Republican Party issued a statement urging the legislature to suspend state gasoline taxes as “the most effective way to relieve pain at the pump.”

Story Highlights

  • Newsom said his package taps into a “historic” state budget surplus to help individuals and families cope with rising costs of living, which the state Finance Department projects will grow 7.6% between fiscal year 2021 and fiscal 2022. Regardless of whether Newsom’s package becomes law, the Finance Department estimates that some 3 million workers stand to benefit from the first inflation-based minimum wage hike expected to take effect under a labor statute enacted in 2016.

  • Only two states – Massachusetts and Washington state – exceed California’s existing $14 minimum wage for smaller companies. They require at least $14.25 and $14.49 per hour, respectively, at businesses of all sizes, U.S. Labor Department figures show. The District of Columbia is higher still, at $15.20 an hour. The U.S. federal minimum hourly wage is currently set at $7.25.