Another wave of minimum wage increases will roll through in about two weeks.  On July 1, the minimum wage rates that must be paid in cities and counties across California will rise.  The local minimum wage increases going into effect July 1 include the following:

• San Francisco and Berkeley will each increase their minimum wage requirements from $16.99 to $18.07 per hour.  Also in Northern California, Alameda, Emeryville, Milpitas, and Fremont will increase their minimum wage rates from between 77 cents and 99 cents per hour.

• The City of Los Angeles will increase its minimum wage from $16.04 to $16.78 per hour.

• The County of Los Angeles will increase its minimum wage for work performed in unincorporated areas of the county from $15.96 to $16.90 per hour.

• Malibu and Santa Monica will each increase their minimum wage from $15.96 to $16.90 per hour.  Santa Monica will increase its minimum wage for hotel workers from $18.17 to $19.73.

• Pasadena will increase its minimum wage from $16.11 to $16.93 per hour.

• The grandaddy of them all is the City of West Hollywood which will increase its minimum wage to $19.08 per hour for employers of all sizes!  Currently, the city requires small employers to pay at least $17 per hour, large employers to pay at least $17.50 per hour, and hotels to pay $18.35 or more per hour.  Located in Los Angeles County, West Hollywood continues to maintain the highest minimum wage requirements of any jurisdiction in California.

The increased wage rates above apply to work performed in the particular city or county.  The wage rates are not determined by where the employer is based.   

The minimum wage requirements of each of the localities listed above exceed the current state minimum wage rate of $15.50 per hour.  The state minimum wage is not currently scheduled for any further increase.  However, an initiative named the Living Wage Act of 2022 will appear on California ballots in the November 5, 2024 election.  If approved by voters, the initiative will mandate increases in the statewide minimum wage up to $18.00 per hour over the few years following the election.

The local minimum wage hikes above will govern the pay requirements for non-exempt employees.  The local hikes will not increase the minimum salary that must be paid to classify an employee as exempt because that minimum salary requirement is tied to the statewide minimum wage, not local minimum wage ordinances.  Given the current state minimum wage, the minimum salary required for exempt status is $64,480.00 per year.   

Before July 1, employers with employees in California should attend to the following:

Where are Your Minimum Wage Employees Working?

The first step in determining whether you need to take action to comply with the coming minimum wage hikes is to know where your minimum wage employees are working.  Where are your remote employees in particular working?  Are you sure you know where they are working?  Are any of your minimum wage employees working in any of the cities or counties with minimum wage hikes going into effect on July 1?

Update Paystubs

For employees whose hourly rates must increase no later than July 1, wage rates on paystubs and payroll processes need to be updated.

Comply with Notice Requirements

Many of the localities with minimum wage figures set to increase on July 1 also require that employers update workplace posters or give employees other notice of the updated wage requirements.  Some ordinances require that posters and notices be written in languages in addition to English.  Remote workers should be emailed the required information.

Consider the Effect Downstream

Obviously, when the minimum wage climbs, pressure is likely coming to increase the wage rates paid to non-exempt employees who are paid at rates higher than the minimum and even to increase salaries for exempt employees.  Assess how that dynamic is likely to play out in your workforce and prepare.

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