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State round-up: wage increases defeated or vetoed: governor Schwarzenegger vetoes health care reporting bill.

In an election that the International Franchise Association hopes is a precursor to November 2006, Albuquerque voters on Oct. 4 rejected an attempt by organized labor and the Association of Community Organizations for Reform Now to enact a city-wide living wage ordinance of $7.50 an hour. This was a major setback for proponents of minimum wage increases and demonstrates that these initiatives can be defeated with the right message. Next year the labor group plans to put similar wage increases on the state-wide ballot in at least five states: Arizona, California, Michigan, Nevada and Ohio. In New Mexico, living wage proponents, including Gov. Bill Richardson, have vowed to attempt to pass a wage hike through the legislature's 30-day session that commences on Jan. 17 and adjourns in mid-February.

Meanwhile, in September, California Gov. Arnold Schwarzenegger vetoed two minimum wage bills: one that would have raised the wage to $7.75 an hour and the other that would have loosened guidelines for lawsuits in cases of alleged labor code violations.

Assembly Bill 48, the minimum wage increase legislation, would have hiked the California minimum wage to $7.25 an hour in 2006 and $7.75 in 2007. The legislation also automatically indexed the wage to inflation every year and would have made California's wage the highest in the country. In his veto message, the governor said that automatic indexing is dangerous because it fails to account for changes in the economy which could have deleterious effects on the economic health of the state. In early September, IFA sent the governor a letter requesting that he veto this legislation.

California Senate Bill 174, also vetoed, was legislation that would have allowed workers who alleged that they weren't paid the minimum wage or proper overtime wages to bring lawsuits on their own behalf and on behalf of other employees at the workplace. This would have been accomplished by relaxing California's class action rules.

Gov. Schwarzenegger also vetoed Assembly Bill 89, which would have required the California Department of Health Services and the Managed Risk Medical Insurance Board to report to the legislature all employers with 25 or more employees who have workers who either access Medi-Cal, the state's Medicaid plan, on their own or support dependents who access the system. Similar reports in Massachusetts and Connecticut have been used as springboards for legislation mandating employer-paid health care.

In all in 2005, six states enacted minimum wage increases: Connecticut, Hawaii, Minnesota, New Jersey, Vermont and Wisconsin, while governors in Maryland, Rhode Island and California vetoed minimum wage legislation. Only one state, Illinois, enacted a health care reporting bill like the one vetoed by Gov. Schwarzenegger, while three others were vetoed and another 11 failed to pass.

Matt Lathrop is director of state government relations for the International Franchise Association. He can be reached at 202-662-0792 or
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Author:Lathrop, Matt
Publication:Franchising World
Geographic Code:1USA
Date:Dec 1, 2005
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