California Employers Beware: Many California Cities Have Enacted Minimum Wage Ordinances
California’s minimum wage increased to $10 per hour effective January 1, 2016. This is the second increase in just 18 months under legislation originally signed by Governor Jerry Brown in 2013. Unfortunately, this latest increase to the statewide minimum wage is not the only one facing California employers. More than a dozen cities across California have already enacted their own minimum wage ordinances requiring employers to pay workers at rates as high as $15.37 per hour – and several other cities are looking to follow suit. It is a hodgepodge environment in our state, when it comes to minimum wage regulation.
To complicate matters more for business owners and managers, several of these local ordinances also include posting and mandatory sick leave requirements (above and beyond California’s recently-enacted statewide sick leave law). This patchwork of laws creates an administrative quagmire for employers—particularly those with multiple locations across the state (or with employees who travel and work in more than one municipality during the course of a workweek)—and only increases the cost of doing business in one of the costliest states in the nation.
The California cities that have local minimum wage ordinances currently in effect are listed below, together with their applicable local minimum wage rates and the known upcoming increases:
City Local Minimum Wage As of January 2016 Upcoming Increases
Berkeley $11.00/hour $12.53/hour
(effective October 1, 2016)
Emeryville $12.25/hour for $13/hour for
businesses with 55 o businesses with 55 or
fewer employees fewer employees
$14.44/hour for $14.82/hour for
businesses with more businesses with more
than 55 employees than 55 employees
(effective July 1, 2016)
Long Beach $13.80/hour for hotel workers --
Los Angeles $10.50/hour for businesses with $10.50/hour
26 or more employees for business with
(effective July 1, 2016) 25 or fewer employees
(effective July 1, 2017)
for hotel workers
Mountain View $11.00/hour --
Oakland $12.55/hour --
Palo Alto $11.00/hour --
Richmond $11.52/hour --
San Francisco $12.25/hour $13.00/hour
(effective July 1, 2016)
San Jose $10.30/hour --
Santa Clara $11.00/hour --
Sunnyvale $10.30/hour --
Other California cities have recently approved similar increases to the local minimum wage. Sacramento passed an increase to its local minimum wage in October 2015, which will progressively raise the minimum wage to $12.50 per hour by 2020, with the first increase to $10.50 scheduled to go into effect on January 1, 2017 for employers of at least 100 employees. Employers with fewer than 100 employees will be required to comply with the yearly increases in the Sacramento minimum wage one year after larger employers (starting in 2018).
A similar ordinance was adopted by San Diego’s City Council in 2014. The ordinance would incrementally raise the minimum wage in that city to $11.50 by 2017, but opponents succeeded in collected enough petition signatures last year to force the issue to a public vote. The public referendum is currently set to go before voters in June 2016, and the law remains suspended until then.
Long Beach employers with more than 25 employees will also see an increased in the local minimum wage to $10.50 starting in 2017, $12 by 2018, and $13 by 2019. Like Sacramento, small employers (employers with 25 or fewer employees in this case) will get a one-year delay to comply with the raised rates.
Finally, last week, Pasadena’s City Council approved a similar increase to the local minimum wage at its February 1, 2016 meeting. The move raises the minimum hourly rate for city employees incrementally to $13.25 by July of 2018. A more business-friendly proposal with a $12.50 cap was previously rejected by Pasadena’s Economic Development and Technology Committee. The City Council’s decision also allows for increasing the minimum wage further to $15 per hour by 2020 following an economic study on the impact of the initial set of minimum wage raises that is to be completed in early 2019.
These California municipalities lead a nationwide trend that has seen an unprecedented number of local governments regulating the minimum wage within their boundaries. As of January 2016, at least eleven U.S. cities outside of California had also adopted local minimum wage provisions above their state minimum wage.
Unless a higher state wide minimum wage is enacted, California employers can expect that local municipalities will continue to step in with their own minimum wage legislation. This blog will attempt to continue to keep you updated periodically with the developments related to California local and statewide minimum wage issues.