AB 885

Under the current state minimum wage law, employers are required to pay to

their employees a living wage, which is defined as compensation that is sufficient to

enable an employee to maintain himself or herself under conditions consistent with

his or her welfare. Under that law, the Department of Workforce Development

(DWD) is required to investigate and determine the living wage. If, upon

investigation, DWD finds that there is reasonable cause to believe that the wages

paid to any employee are not a living wage, DWD must appoint a wage council,

selected so as fairly to represent employers, employees, and the public, to assist DWD

in its investigations and determinations. In determining the living wage, DWD may

consider the effect that an increase in the living wage might have on the economy of

the state, including the effect of a living wage increase on job creation, retention, and

expansion; on the availability of entry-level jobs; and on regional economic

conditions within the state.

This bill creates a permanent wage council in DWD consisting of five

representatives of employers, including a representative of an association that is

primarily composed of small businesses, appointed by the secretary of workforce

development (secretary) for three-year terms; five representatives of employees

appointed by the secretary for three-year terms; the chairpersons and ranking

minority party members of one senate standing committee and one assembly

standing committee concerned with labor issues, appointed as are the members of

standing committees in their respective houses; and five representatives of the

public interest appointed by the secretary for three-year terms.

The bill requires the wage council, early in each regular session of the

legislature, to convene for the purpose of studying the need for an increase in the

living wage and making recommendations to DWD for any changes in the living

wage that may be necessary to ensure that the wages paid to any employee are a

living wage. The wage council, in conducting that study and making those

recommendations, and DWD, in revising the living wage, must consider any changes

in the consumer price index and the effect of those changes on the real income of

employees in this state. The wage council and DWD may also consider the effect that

an increase in the living wage might have on the economy of the state, including the

effect of a living wage increase on job creation, retention, and expansion; on the

availability of entry-level jobs; and on regional economic conditions within the state.

Under the bill, the wage council must submit a report of its findings and

recommendations, together with an explanation for those findings and

recommendations, to the secretary, the governor, the speaker of the assembly, the

senate majority leader, and the minority leaders of each house of the legislature and

to the standing committee of each house of the legislature that is concerned with

labor issues. DWD must consider the findings and recommendations of the wage

council and, if DWD approves those findings and recommendations, DWD, using