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September 15, 2006
Schwarzenegger Signs Minimum-Wage Increase, Vetoes Healthcare Mandate

California Governor Arnold Schwarzenegger has signed legislation that will raise the minimum wage to $8 an hour by January 1, 2008, but the governor vetoed legislation that would have required large employers to spend a certain percentage of their total wages on healthcare insurance.

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The minimum wage will rise in two steps. On January 1, 2007, the minimum wage will increase from $6.75 an hour to $7.50. On January 1 2008, the minimum wage will increase another 50 cents to $8.00 an hour.

In August, Schwarzenegger and Democrats reached a deal to raise the minimum wage after the governor objected to previous legislation that would have tied future increases to the minimum wage to inflation.

In California , the last increase in the minimum wage came in January 2002. More than 1 million Californians earned the minimum wage in 2004, according to U.S. Census Bureau data.

Schwarzenegger vetoed legislation that would have required for-profit employers with 10,000 or more employees in the state to spend at least 8 percent of their total wages on healthcare insurance or pay the difference to the state. The legislation would have required large nonprofit organizations to pay at least 6 percent of their total wages on healthcare insurance or pay the difference to the state.

Lawmakers in Maryland passed similar legislation earlier this year, but a federal judge struck down the law. The judge ruled that the Employee Retirement Income Security Act of 1974 (ERISA) preempted the Maryland law.

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