A bill regarding an increase in the California state minimum wage could become a reality in the near future. On Thursday, September 12, 2013, the California state Senate approved AB 10, sending legislation back to the Assembly for a final vote before it goes to Governor Jerry Brown.  There is a good chance the bill could become law as Governor Brown has already indicated he would sign the bill.

AB 10 would be the first increase in California’s state minimum wage in six years and would give California one of the highest statewide rates in the nation.  If signed into law, the bill would raise California’s minimum wage from the current $8.00 an hour to $9.00 by July 1, 2014 and to $10.00 by January 1, 2016.

Employers with collective bargaining agreements in California should be certain to determine whether they will remain in compliance in light of the pending rate change.  Under most California Wage Orders, employers and unions are permitted to negotiate for overtime premiums different from those required by the Wage Order so long as their employees are covered by a valid collective bargaining agreement designating wages, hours of work, and working conditions and the employees’ regular hourly rate of pay is not less than 30 percent more than the state minimum wage. If AB 10 is signed into law, employers should be sure to review whether their union contracts or other procedures are affected.