Businesses that have worksites or operate within Los Angeles City or County need to review the minimum wage laws that go into effect July 1, 2016.  While there are still many unanswered questions about the ordinances, there are key items employers need to start reviewing now to ensure compliance by the July 1, 2016 implementation.  For today’s Friday’s Five, here are five issues employers need to understand about the Los Angeles minimum wage law:

  1. What is the new Los Angeles minimum wage?

Starting July 1, 2016, the minimum wage in the City of Los Angeles will increase according to the following rate:

Effective Date Employers With 26 or more Employees Employers with 25 or fewer Employees or Non-Profit corporations with 26 or more Employees with approval to pay a deferred rate
7/1/2016 $10.50 Deferred
7/1/2017 $12.00 $10.50
7/1/2018 $13.25 $12.00
7/1/2019 $14.25 $13.25
7/1/2020 $15.00 $14.25
7/1/2021 $15.00 $15.00

Los Angeles County also passed an ordinance that tracks this schedule, and applies to Los Angeles County, except for any incorporated cities within the County.  See below for maps and further details.

  1. What are the potential penalties for violation of the City’s ordinance?

An employer who violates minimum wage requirements is liable to the employee for payment of back wages and an additional penalty of $100 for each day that the violation occurred or continued.  Where retaliation has occurred, the employee is entitled to reinstatement and a trebling of all back wages and penalties.

In addition, employers are subject to administrative fines as set forth below:

Administrative Fines

Failure to post notice of the Los Angeles Minimum Wage rate $500 per day per employee
Failure to allow access to payroll records $500 per day per employee
Failure to maintain payroll records or to retain payroll records for your years $500 per day per employee
Failure to allow access for inspection of books and records or to interview employees $500 per day per employee
Retaliation for exercising rights under the ordinance $1,000 per day per employee
Failure to provide employer’s name, address, and telephone in writing $500 per day per employee
Failure to cooperate with the Division’s investigation $500 per day per employee
Failure to post Notice of Determination to employee $500 per day per employee

The maximum administrative fine that could be paid to the City for each type of violation is $5,000 per employee per year, except for a retaliation violation the maximum is $10,000 per employee per year.  The County’s ordinance does not track the City’s penalties exactly, but the penalties are still very substantial.

  1. Which agency will enforce compliance with the City’s ordinance?

 The Department of Public Works, Bureau of Contract Administration, is the Designated Administrative Agency for the Ordinance and has the administrative responsibilities to implement the guidelines and rules.  The BCA will be the agency that investigates any claims for minimum wage violations, enforcement of the notice, posting, or payroll records requirements, and complaints of retaliation.

It is important to note that the ordinance provides that any adverse action against an employee within 90 days of the employee’s exercise of protected rights may be construed as retaliation for the exercise of such rights.

  1. What are employer’s new notice requirements?

Under Los Angeles City’s ordinance, every employer must post in a clearly visible place at any workplace or job site where any employee works, the notice published each year by the Division informing employees of the current minimum wage rate and of their rights under the Ordinance.  The notices made available by the Division can be downloaded from its website here:  The English and Spanish poster is embedded below.

Notices must be translated if at least 5% of the employees at the workplace or job site speak a different language.  It is not clear which “workplace” should be evaluated if an employer does not have a job site not within Los Angles city or county.  Just another unanswered question about this regulation.

Los Angeles County’s ordinance also sets forth that employers within the County must post a similar notice that is to be developed by the County’s Department of Consumer and Business Affairs (“DCBA”), which is required to make this notice available to employers to post.  However, at the time of this article, the DCBA’s website does not have the notice available.

  1. How can a company determine the city or county boundaries?

The city of Los Angeles published a FAQ that “recommend visiting as a reference” to determine the City’s boundaries.  The city’s ordinance only applies to companies located or conduct business in the incorporated city limits.  The County of Los Angeles also passed an ordinance that closely tracks the city’s ordinance as discussed above, and the County ordinance will apply to businesses within the County, but not within the City of Los Angeles, or other incorporated cities within the County.  Click here for a map of the County of Los Angeles that also sets forth the incorporated cities.

It is important for employers to understand if the City or County requirements apply to their workforce, and understand the difference between the two.  I’m sure this is not the last article I write on this topic.  Stay tuned.

Also, if you would like to learn more about this topic, I am having a seminar on June 22, 2016 that will discuss these minimum wage developments, as well as other legal developments that employers need to be aware at this mid-point in 2016.  More information about the event can be found here.