To repeal the current state minimum wage law that makes it unlawful to employ a worker for less than $7.40 an hour, and replace it with a new law gradually increasing the mandated minimum to $9.25 an hour in 2018. The minimum amount the employer of a worker who receives tips must pay would rise from $2.65 to an amount that is 38 percent of the non-tipped minimum, or $3.52. (A tipped-worker’s employer must pay the difference between this amount and the regular minimum if tips come up short).
These figures would increase with inflation (with a 3.5 percent annual cap), and the state would be required to reimburse local governments for any cost increases caused by the mandated wage hikes. The wage mandates would be suspended if the state unemployment rate rises above 8.5 percent.
As introduced the bill was seen as a Republican gambit to keep an “initiated law” off the November ballot, to hike the mandated minimums to $10.10 for both tipped and non-tipped employees. It became a bipartisan gambit after negotiations for the higher rate and inflation indexing brought most Democrats on board..