Update applicable to:

All employers who conduct business in California including multi-state employers with workers in California

What happened?

Governor Newsom signed Assembly Bill (AB) 102 on July 10, 2023, amending the Budget Act of 2023. AB 102 took immediate effect as a Budget Bill and included a $3,000,000 appropriation to the Industrial Welfare Commission (IWC).

What are the details?

• The IWC is an administrative entity responsible for regulating wages, hours, and working conditions in California.
• The IWC had previously been defunded by the California Legislature in 2004 but its 18 wage orders remained in effect, without updates since 2001.
• Under the appropriations in AB 102, the IWC will convene industry-specific wage boards to adopt orders specific to wages, hours, and working conditions in different industries.
• These new orders must not have standards that are less protective than existing state law.
• Industries with over 10 percent of workers at or below the federal poverty level will be given priority for consideration by the IWC.
• The IWC is required to convene by January 1, 2024, and adopt final recommendations for new wage orders by October 31, 2024.

For more information, please see the links below:

Bill AB102

Article 1, Article 2, Article 3

What do employers need to do?

Employers should stay informed about any industry-specific wage boards and the new wage orders that may be adopted in their respective industries. Employers must ensure compliance with the existing wage orders and California Labor Code and stay updated on any changes that may arise from the IWC’s work. Employers in industries with a high percentage of workers below the federal poverty level should be prepared for potential changes in wages, hours, and working conditions that may result from the IWC’s prioritization.

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