Are You Compliant with Your Counties Minimum Wage Adjustments?

November 15, 2020

Paying employees at least the minimum wage is one of the most basic legal requirements that most employers have to meet. And while most employers are generally aware of changes…

Paying employees at least the minimum wage is one of the most basic legal requirements that most employers have to meet. And while most employers are generally aware of changes to the minimum wage rate in their state, there can be local or county requirements that they are not aware of, and failure to meet these requirements can result in costly litigation.

One reason for non-compliance is that, while state regulations often take effect on January 1 of a given year, counties may impose additional requirements that take effect on a different date.

Statewide Minimum Wage in California

In California, the statewide minimum wage rate changed on January 1, 2020, to $12 an hour for employers with 25 or fewer employees and $13 an hour for employers with 26 or more employees. This change reflects the state’s goal to reach a $15 hourly minimum wage rate by 2023. The statewide rate will increase by $1 every year on January 1 (January 2 in 2021) so that by January 1, 2023, the rate will be $15 for all employers.

Variances in Some California Counties

But to make matters further complicated, many counties or cities in California have set their own minimum wage rates, some of which also took effect on January 1, 2020. However, other areas have minimum wage changes that later took effect on July 1, 2020. This trend of exceeding the state minimum wage is particularly popular with counties in and around Los Angeles and the Bay Area/Silicon Valley, where the cost of living is higher than in other areas of the state.

In 2020, there are 13 cities and counties that have made local minimum wage ordinances that take effect on July 1, 2020. Employers in these jurisdictions must be aware of the changes and have made adjustments when necessary. A failure to do so could result in legal ramifications.

A list of the 13 areas with changes that took place on July 1, 2020 includes:

City/CountyRate Effective July 1, 2020
Alameda (County)$15.00 for all employers
Berkeley$16.07 for all employers
Emeryville$16.84 for all employers
Fremont$13.50 for employers with 25 or fewer employees

$15.00 for employers with 26 or more employees

Los Angeles (City & County)$14.25 for employers with 25 or fewer employees

$15.00 for employers with 26 or more employees

Malibu$14.25 for employers with 25 or fewer employees

$15.00 for employers with 26 or more employees

Milpitas$15.40 for all employers
Novato$13.00 for employers with 25 or fewer employees

$14.00 for employers with 26 or more employees

$15.00 for employers with 100 or more employees

Pasadena$14.25 for employers with 25 or fewer employees

$15.00 for employers with 26 or more employees

San Francisco (City & County)$16.07 for all employers
San Leandro$15.00 for all empoyers
Santa Monica$14.25 for employers with 25 or fewer employees

$15.00 for employers with 26 or more employees

Santa Rosa$14.00 for employers with 25 or fewer employees

$15.00 for employers with 26 or more employees

 

In addition to these changes, two other cities – Hayward and San Carlos – have postponed their local minimum wage changes until January 1, 2021, to minimize the economic burden that many businesses have felt related to the spread of COVID-19.

Also related to COVID-19 is the rise of remote working. Remote workers are entitled to receive the minimum wage rate as determined by the employer’s location, not the employee’s. For instance, if the employer is based in San Francisco while the remote worker resides in Emeryville, the applicable minimum wage would be $16.07 rather than $16.84.

Employers must be cautious about following state minimum wage rates and any local laws or regulations. If the local rate exceeds the state rate, then employers must comply with the local rate.

Minimum wage laws can be confusing. They are also subject to change at any time, which means that employers should also be very proactive about educating themselves about any local regulations that may impact the way they do business. This process can also be complicated since the state minimum wage rate is set by the state legislature, while local ones may be assigned by either a County Commission or City Council.

Failure to meet either state or local minimum wage requirements can be costly for employers. Many business owners find that they are too busy to track all of the changes that may apply to their company. In many of these instances, it may be better to consult with an employment litigation attorney to ensure that you are compliant with all applicable wage laws.

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