Are your employees due for a minimum wage increase this July 1? Thanks to what's now become a confusing patchwork of federal, state and local minimum wage requirements, that's not an easy question to answer. It depends upon the following factors:
- where your business is located;
- how many employees you employ;
- where your employees actually do their work;
- whether the employees are covered by a union contract;
- whether the employees in question are working on a government contract with specified minimum wage rates; and
- the industry in which the employees work.
In California alone there are a total of 37 different wage ordinances. Some provide for a complete exemption if employees are covered under a union contract with a specified wage rate. Since increases in the company's bottom wage rates often have a ripple effect on the wages of those above them, it's important for businesses to analyze these requirements when establishing a company's overall pay scheme.
Besides the federal and CA state minimum wage laws, a number of cities and counties throughout CA have promulgated their own special minimum wage requirements which must be followed. For example, in the Southland, the cities of Los Angeles, Pasadena and Santa Monica have their own minimum wage rules. Los Angeles and Santa Monica each have their own special (higher) minimum wage requirements for hotels and related businesses operating within their geographic boundaries.
These rules can also apply beyond the borders of each city. For example, the City of LA rule not only applies to employers located within the geographic boundaries of the City, but also to any employee who works within the City's borders for 2 or more hours in a week. If your minimum wage employees sometimes work in LA, you have two choices: either pay the City minimum for every hour or track the number of hours spent in LA and adjust the pay accordingly.
Yet another concern: the so called hotel ordinances in Los Angeles and Santa Monica not only apply to hotels, but also to an array of businesses allied or connected with the hotel.
Additionally, government contractors may have contractual obligations to pay a higher wage. Any such business should carefully review those contracts to ensure that the correct wages are being paid.
We have prepared the charts below as an easy reference guide for changes slated to go into effect on July 1, 2017 in the cities of Los Angeles, Pasadena and Santa Monica. Be sure to check with your labor law advisor to determine whether your business is covered by a city, county or industry specific ordinance that has special minimum wage rules.
Los Angeles Ordinance
|
|
Effective Date
|
Minimum Wage Rate
|
|
Employers with 26+
|
7/1/17
7/1/18
7/1/19
7/1/20
7/1/21
7/1/22
|
$12.00
$13.25
$14.25
$15.00
$15.00
CPI
|
|
Employers with 25 or fewer employees
|
7/1/17
7/1/18
7/1/19
7/1/20
7/1/21
7/1/22
|
$10.50
$12.00
$13.25
$14.25
$15.00
CPI
|
