Charge to the 2000 Minimum Wage Board

After an investigation which included public hearings, the Industrial Welfare Commission (IWC) found that the current state minimum wage may be inadequate to supply the cost of proper living. It has selected this wage board, consisting of an equal number of employer and employee representatives and a nonvoting chairperson, to consider whether the state minimum wage should be increased and, if so, how much it should be increased.

After studying the materials sent to you for review, the IWC requests that you report your recommendations on the following matters, consistent with the basic statutory responsibility to insure that the minimum wage is adequate to supply the cost of proper living:

1. The adequacy of the current minimum wage of $5.75 per hour.

If you determine that the minimum wage should be increased, you should make recommendations as to how much it should increase and the timing of such an increase or increases. In investigating this matter and making recommendations to the IWC, you may bare in mind that a minimum wage increase may occur all at once or may be phased in over a period of time. In weighing the adequacy of the minimum wage, you may consider, but are not bound, by such factors as the historical level of the minimum wage in terms of its real dollar purchasing power, the poverty level as established under federal law, and the cost of living in California.

2. The adequacy of the amount which may be credited against the minimum wage for meals and lodging in Section 10 of all of the IWC wage orders.

In investigating this matter and making recommendations to the IWC, you may consider, but are not bound by, the IWC’s traditional determination to raise these credits by the percentage increase in the state minimum wage.

3. The adequacy of the current $900 monthly salary threshold contained in Section 1(A) of Wage Order 14, which exempts a worker in an agricultural occupation who is engaged in work which is primarily intellectual, managerial, or creative from all provisions of the order, including overtime, meals and rest periods, and other IWC regulations establishing working condition standards.

In investigating this matter and making recommendations to the IWC, you may consider, but are not bound by, the fact that the Legislature has recently enacted Labor Code section 515(a), which establishes a remuneration threshold of twice the minimum wage to qualify for a similar exemption from the requirement to pay overtime in all other occupations and industries. You may also consider that the current $900 remuneration test was established in 1980 when the state minimum wage was $3.10 per hour. Furthermore, that $900 figure is equivalent to less than what is paid to a full-time employee earning the present minimum wage.

4. The appropriateness of continuing the existence of exemptions from the minimum wage for certain occupations and industries.

In investigating this matter and making recommendations to the IWC, you may consider any evidence concerning the historical basis for such exemptions. Moreover, you may bear in mind the impact of the passage of Proposition 210 in 1996, which increased the minimum wage "for all industries." In your materials, you will find a list of these exemptions and background information on them.