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supported key parameters of a local minimum wage ordinance, and either staff’s <br />recommended approach or Alternative C. <br />Federal, State and Local Minimum Wages <br />The minimum wage established by Federal, State and local government law sets the <br />lowest wage an employer legally may pay to workers. As of January 1, 2018, California <br />law requires the minimum wage for all industries to be no less than $10.50 per hour for <br />businesses with less than 25 employees and $11.00 per hour for businesses with 26 or <br />more employees. The Federal minimum wage for covered nonexempt employees has <br />been $7.25 per hour since July 24, 2009. <br /> <br />On April 4, 2016, California Governor Jerry Brown signed legislation (SB 3, Leno) which <br />will raise California’s minimum wage to $15.00 per hour by 2022. After January 1, 2023, <br />future wage increases are tied to inflation, reflecting increases in the Consumer Price <br />Index, up to 3.5% per year. Under the new state law, the Governor may suspend the <br />wage increase schedule during economic downturns. The increased minimum wage <br />levels would be applied uniformly across the state. The law also maintains existing <br />exemptions in the State’s minimum wage law. This legislation gives California the <br />highest minimum wage in the country along with New York. <br /> <br />State of California Minimum Wage <br />Effective Date <br />Employers w/ 25 <br />Employees or Less <br />Employers w/ 26 <br />Employees or More <br />January 1, 2016 $10.00 $10.00 <br />January 1, 2017 $10.00 $10.50 <br />January 1, 2018 $10.50 $11.00 <br />January 1, 2019 $11.00 $12.00 <br />January 1, 2020 $12.00 $13.00 <br />January 1, 2021 $13.00 $14.00 <br />January 1, 2022 $14.00 $15.00 <br />January 1, 2023 $15.00 $15.00+CPI <br /> <br /> <br />Local governments retain the ability to adopt local wage ordinances. Such ordinances <br />can increase the minimum wage more rapidly than the statewide timeframe or can <br />increase the minimum wage beyond the level set by the State. Currently, Redwood City <br />employers are subject to Federal and State minimum wage laws. When there are <br />conflicts in the laws, the employer must follow the strictest standard, meaning that <br />employers must follow the standard that is most favorable to the employee. Since the <br />State’s law on minimum wage is higher than the Federal law, covered employers are <br />required to pay the State’s minimum wage. Similarly, should the City enact a minimum <br />Attachment 26.3.A. - Page 13