AB 720

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 and 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: 1) any changes in the consumer price index; 2) the effect of those

changes on the real income of employees in this state; and 3) 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.

If DWD approves the findings and recommendations of the wage council, DWD may

promulgate rules to revise the living wage.

In addition, the bill specifies that the biennial living wage revision procedure

created under the bill does not preclude DWD from convening the wage council at

other times during the regular session of the legislature if, upon investigation, DWD

finds that there is reasonable cause to believe that the wages paid to any employee

are not a living wage. If DWD so convenes the wage council, the wage council so

convened must study the need for an increase in the living wage and report its

recommendations as provided in the bill.

Finally, the bill increases the minimum wage for employees generally,

beginning on January 1, 2015, from $7.25 per hour to $8 per hour or an amount

determined by DWD by rule, whichever is greater.