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California Revives Industrial Wage Commission

19 Jul


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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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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