[06/26/20 UPDATE: Not so fast Bay Area! Given the current conditions due to coronavirus, Hayward’s and San Carlos’ city councils voted to delay the local minimum wage increase, which was previously scheduled for July 1, 2020. Now, the increase in the cities’ minimum wage will align with that of the state, at least with respect to timing. That is, effective January 1, 2020, Hayward’s minimum wage will increase to $15 for large employers (26 or more employees) and $14 for small employers (25 or less employees). Similarly, San Carlo’s minimum wage will increase to $15, plus the annual change in Consumer Price Index, for a maximum of $15.53 per hour. Employers doing business in these two cities will now have some breathing room, at least with respect to minimum wage compliance.]
As employers continue to assess, incorporate and comply with the recently enacted state and local requirements due to COVID-19, it is easy to lose track of the basic wage and hour requirements. And, as more and more businesses continue to reopen, it is imperative to ensure compliance with both state and local minimum wage requirements. This guide is designed to assist employers in complying with state and local/city minimum wage requirements.
State Minimum Wage
California has a two-tier minimum wage requirement, depending on the employer’s size. Currently, large employers–those with 26 or more employees–are required to pay a minimum wage of $13 per hour. Small employers–those with 25 or less employees–must pay their employees a minimum wage of $12 per hour.
Effective January 1, 2021, California minimum wage rates will increase from $12 to $13 per hour and $13 to $14 per hour for small and large employers, respectively.
Local Minimum Wages
Most importantly, employers must pay close attention to their local jurisdiction(s) (e.g., city) minimum wage requirements. Various cities have enacted minimum wage ordinances setting a higher rate vis-à-vis the state. Although the following is not an exhaustive list, it includes those cities where minimum wage is scheduled to increase effective July 1, 2020.
If your company is doing business in any of the cities below, ensure that wages are being paid accordingly.
|
City |
Applicable Minimum Wage
(Per Hour) |
Other City-Specific Requirements |
| Alameda |
Current Minimum Wage: $13.50 Effective 07/01/20: $15
|
None |
| Berkeley | Current Minimum Wage: $15.59
Effective 07/01/20: $16.07 |
Defining Employee: The Berkeley City Ordinance defines “employee” as any person who works at least 2 hours per week for an employer within the city.
Recordkeeping: The City requires employers to retain payroll records for a period of 4 years, as opposed to the State requirement of 3 years.
|
| Emeryville | Current Minimum Wage: $16.30
Effective 07/01/20: $16.84 |
None
|
| Fremont | Large Employers (26 or more employees)
Current Minimum Wage: $13.50 Effective 07/01/20: $15 Small Employers (25 or less employees) Current Minimum Wage: $12 Effective 07/01/20: $13.50
|
Recordkeeping: The City requires employers to retain payroll records for a period of 4 years, as opposed to the State requirement of 3 years. |
| Los Angeles | Large Employers (26 or more employees)
Current Minimum Wage: $14.25 Effective 07/01/20: $15
Small Employers (25 or less employees) Current Minimum Wage: $13.25 Effective 07/01/20: $14.25
|
Los Angeles City Living Wage Ordinance: The City’s Living Wage Ordinance requires City Contractors (employers who have a service contract with the City) to pay specific wage rates, which depend on whether the employer provides health benefits to its employees. City Contractors are also required to provide employees with time off as required by the Living Wage Ordinance.
Citywide Hotel Worker Minimum Wage Ordinance: The City of Los Angeles requires hotel employers (those with 150 or more guest rooms) to (1) pay their employees a specific minimum wage; (2) provide 96 hours of paid time off per year; and, (3) at least 80 additional hours of uncompensated time off per year. Paid Sick Leave: Employers must comply with the City’s paid sick leave requirements, which provide greater benefits than the State’s paid sick leave. |
| Malibu | Large Employers (26 or more employees)
Current Minimum Wage: $14.25 Effective 07/01/20: $15
Small Employers (25 or less employees) Current Minimum Wage: $13.25 Effective 07/01/20: $14.25
|
None |
| Novato | Very Large Employers (100 or more employees)
Current Minimum Wage: $13 Effective 07/01/20: $15
Large Employers (between 26 and 99 employees) Current Minimum Wage: $13 Effective 07/01/20: $14
Small Employers (25 or less employees) Current Minimum Wage: $12 Effective 07/01/20: $13
|
None |
| Pasadena | Large Employers (26 or more employees)
Current Minimum Wage: $14.25 Effective 07/01/20: $15
Small Employers (25 or less employees) Current Minimum Wage: $13.25 Effective 07/01/20: $14.25
|
None |
| San Francisco | Current Minimum Wage: $15.59
Effective 07/01/20: $16.07 |
A small number of Government Supported Employees are subject to a minimum wage of $13.79. That rate will increase to $14.22 on 07/01/20. |
| San Leandro | Current Minimum Wage: $14
Effective 07/01/20: $15 |
None |
| Santa Monica | Large Employers (26 or more employees)
Current Minimum Wage: $14.25 Effective 07/01/20: $15
Small Employers (25 or less employees) Current Minimum Wage: $13.25 Effective 07/01/20: $14.25 |
Hotel Workers: Santa Monica hotel workers are subject to a specific hourly rate of $16.63. This rate will increase on 07/01/20.
Paid Sick Leave: The City requires employers to provide 40 hours (small employers) or 72 hours (larger employers) of paid sick leave. |
Understandably, minimum wage requirements are not at the top of the list in employers’ agendas. Nonetheless, all companies must continue to comply with state and local requirements, and ensure that all wages are being paid as mandated by law.