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06 Oct

October 2021: California Passes Bill Ending Sub-Minimum Wage for People with Disabilities

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Update Applicable to:
Employers in the state of California.

What happened?
On September 27, 2021, Governor Newsom signed the Senate Bill 639 (SB 639) to begin phasing out a sub-minimum wage program for those with mental and/or physical disabilities.

What are the details?
Effective, January 1, 2022, the law begins the requirement to develop a plan to phase out the program that allowed employers in the state of California to pay employees with physical and/or mental disabilities less than minimum wage per Section 1191.5 of the Labor Code relating to employment.

With the signing of the bill, the program will be phased out by January 1, 2025 or once the phaseout plan has been released, whichever is later. Starting on the effective date, the bill would prohibit new special licenses from being issued and would permit a license to only be renewed for existing license holders who meet requisite benchmarks. The benchmarks will be provided in the phaseout plan.

The bill can be read here.

Articles on the bill can be read here and here.

What do employers need to do?
Employers should review the bill, their payroll processes, and any special contracts to make updates to the applicable policies and processes to stay in compliance with the new law. Vensure will notify clients when the phaseout plan has been released.