UC's action is expected to heighten debate in the state Legislature about a proposal to boost the statewide minimum wage and has also prompted calls for the California State University system to follow suit.
Napolitano announced the move a day after Los Angeles County — the nation's largest government agency — agreed to increase the minimum wage to $15 an hour in all unincorporated communities by 2020. Los Angeles enacted a similar plan earlier this year, becoming the largest city in the nation to do so.
A plan to increase California's minimum wage from $9 to $13 an hour by 2017 was approved by the state Senate last month on a largely party-line vote, with Democrats in support and Republicans opposed. It is now pending in the Assembly. Even without that bill, a state law approved two years ago calls for the minimum wage to rise to $10 an hour in January.
Sen. Mark Leno (D-San Francisco), the recent bill's author, said he was concerned that census figures show a quarter of the state's 38 million residents live in poverty.
But Gov. Jerry Brown's finance department this month came out in opposition to the bill. Officials said the wage hike would increase costs to state agencies by $393 million this year, nearly $1 billion next year and $3.4 billion the year after, with about half coming from the state general fund.
Brown's staff also said it would hurt the state's overall economy.
A spokeswoman for Brown, who is a Democrat, declined to comment Wednesday about the UC wage increase. Brown, a member of the UC Board of Regents, was in Vatican City on Wednesday for a conference on global warming hosted by Pope Francis.
The CSU system has up to now not considered a minimum wage increase. But after the UC's announcement, Lt. Gov. Gavin Newsom, a Cal State trustee, urged that 23-campus system to follow suit.
The minimum wage battle is being pushed by labor activists at the national and local levels and has been embraced by many Democrats as a solution to income inequality. Other West Coast cities, including Seattle and San Francisco, have enacted higher minimum wages in the last two years. A New York state panel approved a proposal Wednesday to raise the minimum wage to $15 an hour for fast-food workers.
The UC plan is expected to affect only a fraction of the sprawling university's workforce: About 3,200 employees who work more than 20 hours a week as well as several thousand more who are not direct employees
but work for contractors doing business with the university.
Napolitano said she hoped the action would bolster the statewide and national movement to raise minimum wages for both public and private employees.
"In general, the country is and should be moving in this direction. Given our education and public service missions, it seems highly appropriate that we be one of the first to take this step," said Napolitano, a former Democratic governor of Arizona and U.S. secretary of Homeland Security in the Obama White House.
"This is the right thing to do for our workers and their families," Napolitano said at the UC regents meeting.
UC officials estimate that the move will cost about $14 million a year and that most of that will come not from state funding and tuition but rather from parking fees, hospital revenues and bookstore sales.
Many of those affected work at retail shops and cafeterias on the 10 UC campuses, including students. However, the plan does not affect those who are on work-study stipends as part of their financial aid packages since they are not assigned more than 20 hours a week, officials said.
UC employs about 100,000 nonteaching staffers, most of whom already earn much more than $15 an hour, whether unionized or not.
Under the plan, the minimum wage for employees who work more than half time at UC will be $14 an hour by Oct. 1, 2016, and $15 by Oct. 1, 2017.
Assembly Republican Leader Kristin Olsen of Modesto criticized Napolitano's announcement, saying it will lead to higher costs for students already struggling to pay for college.
"It is concerning that UC would implement this proposal just after spending an entire year arguing they do not have the funds necessary to keep tuition flat and enroll more California students," Olsen said. "This is not Robin Hood in that the money being spent is not from the rich; it's from students who go deep into debt to invest in their future."
UC officials said that undergraduate tuition for state residents will remain frozen for the next two years as part of a budget agreement with Brown and the Legislature. They added that it is too soon to say whether other costs, such as parking fees or dining costs, might increase because of the increased wages.
Labor activists have complained for years about the wages and treatment of people who are hired by outside contractors to perform work on UC campuses. While labor leaders say they are happy about Napolitano's announcement, they said that many of those contract employees still will receive no benefits or much lower ones than UC workers.
Kathryn Lybarger, president of the American Federation of State, County and Municipal Employees AFSCME Local 3299, which represents more than 22,000 UC healthcare workers, respiratory therapists, custodians, food workers and others, said she was pleased that "Napolitano recognizes that there is a problem. That's the good part."
But she said that too many workers for outside contractors remain in "permanent second-class status" without pensions and representation.
The union has been lobbying for a bill being debated in the state Legislature that would require UC to provide employees of outside contractors wages and benefits comparable to university workers.
The legislation was approved in the state Senate and is pending in the Assembly. It is opposed by UC.
"We're just trying to ensure that the most prestigious public school system, university system, in the world actually pay its employees living wages," Sen. Richard Lara (D-Bell Gardens), the bill's author, said shortly before it was approved in March.
State Senate Minority Leader Robert Huff (R-Diamond Bar), during the Senate debate, noted the irony that state lawmakers would increase universities' expenses at the same time they were demanding that tuition remain flat. "This is ill-conceived," he said.
UC spokeswoman Dianne Klein said numbers were not available Wednesday about how many people on outside contracts with UC would see their wages raised since many contracts are involved and would be renegotiated as they come up for renewal.
Times staff writer Carla Rivera contributed to this report.