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Garrett M. Fahy (JD '09) for Daily Journal: Minimum wage, maximum liability exposure

April 21, 2016 -- An article by Pepperdine Law alumnus Garrett M. Fahy (JD '09), titled "Minimum wage, maximum liability exposure," has been published in the Daily Journal.  The article considers the effect of a minimum wage increase on California employers and employees. Fahy practices business litigation at Enterprise Counsel Group, located in Irvine, California.

Excerpt from the Daily Journal:


Earlier this month, Gov. Jerry Brown signed Senate Bill 3, which raises California's minimum wage to $15 per hour by 2022, a 50 percent jump in six years. When the law takes full effect, California will have the highest statewide minimum wage in the nation.

Under the new law, the statewide minimum wage will rise to $10.50 per hour in 2017, $11 per hour in 2018 and then an additional dollar per year until 2022. While the wage hike applies to all hourly employees - the governor's office estimates that 2.2 million Californians earn the minimum wage - firms with 25 or fewer employees will have an extra year to reach $15 per hour.

Much touted was the bill's inclusion of so-called "off-ramps," which purportedly allow pauses in the annual wage raises if economic conditions, such as negative job growth or slow retail sales, warrant. Also, the bill allows the governor to put on hold the next year's wage increase if the state forecasts a budget deficit of more than 1 percent of annual state revenue.

Notwithstanding the bill's purported breaking mechanisms, the minimum wage train has left the station, likely never to return. CPA and State Sen. John Moorlach, R-Costa Mesa, noted that the bill is an "inflection point" in the state's financial history, and there's no going back. What does this mean for employers generally?