May 20, 2015 Los Angeles Minimum Wage to Rise to $15 an hour

On Tuesday the Los Angeles City Council voted to raise the city’s minimum wage to $15 an hour by 2020.  Los Angeles will join San Francisco, San Jose and Oakland as California cities with minimum wages higher than both the federal and state minimum wages.

Discussion

The federal minimum wage is $7.25 per hour.  California’s state minimum wage is currently $9 per hour, and is scheduled to rise to $10 per hour on January 1, 2016.  Employees must be paid the highest minimum wage in effect, which in California is the state minimum wage except in cities that have established their own higher minimum wages.  

The City of Los Angeles does not currently have its own minimum wage, but on Tuesday the City Council voted to establish a city minimum wage of $10.50 per hour effective July 1, 2016.  Thereafter the city’s minimum wage will increase to $12.00 on July 1, 2017; $13.25 on July 1, 2018; $14.25 on July 1, 2019; and $15.00 on July 1, 2020.  Beginning in 2022 the city’s minimum wage will be adjusted for inflation on July 1 of each year.  

California cities that already have minimum wages higher than the state minimum wage include San Francisco (currently $12.25 per hour and scheduled to rise to $13 on July 1, 2016; $14 on July 1, 2017; and $15 on July 1, 2018; followed thereafter by annual adjustments for inflation each July 1); San Jose (currently $10.30 per hour and adjusted each January 1 for inflation); and Oakland (currently $12.25 per hour and adjusted each January 1 for inflation).  

Meanwhile, San Diego’s minimum wage is on hold.  In October 2014 the San Diego City Council voted to establish a city minimum wage that would rise to $11.50 per hour by January of 2017, and would also require employers to provide their employees with up to 40 hours of paid sick leave each year.  But opponents of the ordinance gathered enough petition signatures to put the measure to a public vote.  It will go into effect only if it survives a June 2016 referendum.

What This Means

Employers can no longer assume that complying with federal and state laws is enough.  The trend of cities establishing their own minimum wages appears to be picking up steam.  Employers should take steps to stay abreast of, and comply with, all local minimum wages and other local mandates.

This E-Update was authored by Aaron Buckley.  For more information, please contact Mr. Buckley or any other Paul, Plevin attorney by calling (619) 237-5200.