A new agreement announced by state lawmakers and Gov. Jerry Brown would raise the state's minimum wage to $15 for most employees in 2022 and for all employees in 2023.
The agreement was brokered with the Service Employees International Union, which has been seeking to raise the minimum wage to $15 per hour by 2021 through a ballot initiative in November. If passed by the state legislature and signed by Brown, the SEIU would likely withdraw the initiative.
"California is proving once again that it can get things done and help people get ahead," Brown said in a statement. "This plan raises the minimum wage in a careful and responsible way and provides some flexibility if economic and budgetary conditions change."
The state's minimum wage hit $10 per hour on Jan. 1. Under the new plan, it would rise to $10.50 next year for businesses with 26 or more employees and continue rising gradually until reaching $15 per hour on Jan. 1, 2022.
For small businesses with 25 employees or fewer, the minimum wage would rise more gradually but still hit $15 an hour on Jan. 1, 2023.
After that the minimum wage would increase up to 3.5 percent annually based on the consumer price index.
But the governor would have the power to pause an increase if the statewide job growth over the prior three to six months were negative and retail sales over the prior 12 months were negative, according to Brown's office.
The governor could also pause an increase if it would cause a forecasted state budget deficit, but can only use this power twice.
State Sen. Mark Leno, D-San Francisco, said in a statement that he expects a bill on the proposal will be heard in the state Legislature this week. Leno has been trying to raise the minimum wage beyond the current $10 per hour since 2014.
"If we truly respect work, we must reward work, and there is no reward in working a full-time job and living in poverty," Leno said. "Today's landmark agreement will lift up poor Californians and give hardworking employees the resources they need to put food on the table for their families."
If passed, the plan may have little effect on some Bay Area municipalities that are already on track for a $15 minimum wage sooner. In November, the Mountain View City Council passed an ordinance to raise the minimum wage in the city to $15 by 2018.
Palo Alto's City Council approved an ordinance last fall to institute a local minimum wage of $11 an hour, effective this past Jan. 1. The council also agreed to a goal of a $15-per-hour minimum wage by 2018 and charged one of its committees to devise the plan forward.
San Francisco's minimum wage will rise to $15 in 2018 under a ballot initiative passed in 2014. The minimum wage in Oakland and Emeryville is already over $12 and will be adjusted annually according to the consumer price index. Berkeley's is slated to go to over $12 later this year and its city council has been considering a plan that could make the city's minimum wage $15 in 2020.
Mountain View Voice and Palo Alto Weekly staff contributed to this report.