With proposals from both Gov. Arnold Schwarzenegger and Democratic leaders in the Legislature, a hike in the state's $6.75-an-hour minimum wage seems almost inevitable.

The main issue being debated now is whether the minimum wage should be indexed annually to inflation: Democrat and labor leaders want it; Schwarzenegger, Republicans and business groups don't.

But lost amid the emotional debate on both sides is the crucial issue of timing. Whatever proposal passes the Legislature this year, businesses that pay employees the minimum wage will likely have to move very quickly within weeks to implement the first 50-cent increase.

The Schwarzenegger proposal SB 1167, carried by Sen. Abel Maldonado, R-San Jose has the first increase to $7.25 an hour taking effect Sept. 1, regardless of when the measure passes. (The measure could conceivably pass in the closing weeks of the legislative session in August.)

Not to be outdone, the Democratic leadership in the state Senate two weeks ago unveiled amendments to their bill SB 328 by Sen. Gil Cedillo, D-Los Angeles that has the first 50-cent increase taking effect 60 days after passage.

The other major bill on the table, AB 48 by Assemblywoman Sally Lieber, D- Mountain View, still has language in it from last year that has the first increase taking effect on July 1 of this year. Given that it's not likely to pass the Legislature before then, that date presumably would be pushed back.

All three measures have the second 50-cent increase to $7.75 an hour hitting on July 1, 2007. (The Cedillo and Lieber bills would then index the minimum wage to inflation starting Jan. 1, 2008.)

Whichever proposal passes the Legislature this summer, the increase to $7.25 an hour could take effect as soon as Sept. 1.

For companies that use payroll services, that should pose little problem; these services can usually process changes in wages within one month. But getting the word out within 30 days to the hundreds of thousands of very small businesses in the state that process their own payrolls could be quite a task, especially since many have owners who don't speak English as their first language. And the consequences for those that don't find out in time: They could be liable for back pay.

"No question it's an aggressive timetable and there may well be issues around notification," said one Democratic staff worker, who said legislators will take into consideration pleas from business owners for more time.

So far, though, business groups are focusing more on eliminating indexing from any minimum wage bill that makes it through. They also say the start date for the final legislation may be negotiable.

Small Business Break?
With small businesses under a constant barrage of legislation and regulations from Sacramento, one lawmaker wants to take stock and see if there's too much regulation.

Assemblyman Juan Arambula, a moderate Democrat from Fresno in the heart of the Central Valley, is proposing to have the state's Office of Small Business Advocate study the cost impact of state regulations on small businesses and come up with ways to reduce those costs.

The bill, AB 2330, has the strong backing of the California Chamber of Commerce, Small Business California and other business groups. And because it's being proposed by a Democrat, it stands at least some chance of getting heard in the next few weeks.

Electric Broadband
The California Public Utilities Commission next month is expected to take up two proposals that will allow electric utilities to take on cable television and phone companies and get into the broadband business.

The companies are pushing a technology that allows broadband transmissions directly over power lines (BPL). But recognizing that utilities would have to spend years and make huge investments to lay the groundwork for broadband, the main proposal from PUC Commissioner Rachelle Chong would allow utilities to enter into contracts with third-party broadband providers and would exempt the utilities from many of the lengthy procedural approvals that normally accompany major construction.

"This Commission believes that more broadband competition will bring lower prices, innovative services and the potential for new rate plans to customers," the proposed decision states.

Of course, many of those customers are businesses, especially those in the entertainment industry that need to transmit video over broadband.

The alternate proposal, from PUC Commissioner Geoffrey Brown, takes a more cautious approach. While it allows utilities to get into the broadband business, it does not exempt them from normal PUC approval process. It would also ban the use of ratepayer funds for the development of broadband service.

Tip File
& #8226; The California Air Resource Board is scheduled to hold a hearing on April 3 on a proposal to streamline requirements for companies that have previously demonstrated compliance with requirements for stationary diesel engines. Companies most affected are those with facilities that use generators. The hearing is at South Coast Air Quality Management District headquarters in Diamond Bar.
& #8226; AB 409, by state Assemblyman Leland Yee, D-San Francisco, would raise the bid preference on state contracts for small businesses and micro enterprises from the current 5 percent (out of 100 points) to 10 percent. The bill is pending in the Senate Committee on Government Modernization, Efficiency and Accountability; and
& #8226; A draft grocery worker retention ordinance is set to come before the West Hollywood City Council early next month. Like the one passed by the Los Angeles City Council last December, this one is aimed at so-called "big box" stores in excess of 15,000 square feet and would require purchasers of those stores to wait 90 days before firing any of the existing employees.

*Staff reporter Howard Fine can be reached by phone at (323) 549-5225, ext. 227, or by e-mail at hfine@labusinessjournal.com .

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