At their May 20th Meeting, the Sonoma City Council discussed and gave direction to staff to prepare a draft ordinance to create a local minimum wage with the following wage rates and components.
- Consumer Price Index (CPI) Inflator — Use Pacific Region CPI with a cap of 3.5%.
- Health Care Credit — Provide a health care credit for minimum wage to maximum of $1.50 per hour.
- Economic Downturn “Off-Ramp” — Link the City’s minimum wage ordinance to the State of California in the event of an economic downtown. (The Governor can pause a scheduled increase for one year if certain economic or budget conditions are met (known as “off-ramps”). The budget off-ramp can only be used twice.) Should the State of California implement an “off-ramp”, the City’s local minimum wage ordinance would automatically follow this State decision.
- Labor Carve Out — Allow an exemption for employers with a collective bargaining agreement, provided that such waiver is explicitly set forth in such agreement in clear and unambiguous terms.
- Tips Cannot be Credited — City minimum wage cannot be offset by the amount an employee receives in tips.
State Minimum Wage Background Information
Under State legislation enacted in 2016, California’s minimum wage increase is being phased in according to the following schedule. For employers with 25 employees or less, effective dates are delayed by one year. By 2023, the minimum wage for all employers will be $15/hour.
Schedule for California Minimum Wage Rate 2017-2023
The Governor can pause a scheduled increase for one year if certain economic or budget conditions are met (known as “off-ramps”). The budget off-ramp can only be used twice.
After reaching $15/hour, the State minimum wage will be adjusted annually for inflation based on the national consumer price index for urban wage earners and clerical workers (CPI-W) and the highest raise allowed in any one year is 3.5%.
The State of California requires employers to pay tipped employees full state minimum wage before tips.
For cities or counties that have a local minimum wage ordinance, the employer is required to pay the highest of those rates applicable to the employee at a particular time.