An increase in temperatures will not be the only increase employers will see this July: employers in the City of Los Angeles and in the City of Santa Monica are reminded that minimum wages will increase starting on July 1, 2016.  Both the Santa Monica and Los Angeles ordinances apply to any employee who works at least two hours or more within the geographic boundaries of the city within a particular week.  Each ordinance includes a phased increase to reach $15.00 per hour in 2020 for most businesses, with a one year delay to 2021 for businesses with 25 or fewer employees and for qualifying nonprofits, as follows:

For employers with 26 or more employees:

• July 1, 2016: $10.50 per hour
• July 1, 2017: $12.00 per hour
• July 1, 2018: $13.25 per hour
• July 1, 2019: $14.25 per hour
• July 1, 2020: $15.00 per hour

For employers with 25 or fewer employees:

• July 1, 2017: $10.50 per hour
• July 1, 2018: $12.00 per hour
• July 1, 2019: $13.25 per hour
• July 1, 2020: $14.25 per hour
• July 1, 2021: $15.00 per hour

The Santa Monica ordinance provides a higher wage for Santa Monica hotel workers of $13.25 per hour on July 1, 2016, and $15.37 per hour on July 1, 2017, but unlike the similar ordinance passed in Los Angeles, the Santa Monica increase will apply to hotels of all sizes (the Los Angeles wage went into effect in July of 2015, for hotels with 300 or more rooms, and will go into effect in July of 2016 for 150-plus-room hotels). Each ordinance allows for a rate of 85% of the minimum wage for statutory “learners” (in Santa Monica) and minors (in Los Angeles) for the first 160 hours of employment.  Both cities provide deferral rates for qualified non-profit employers.

The ordinances are important because they exceed the current California state-mandated minimum wage of $10 per hour, and also surpass the minimum wage increase signed by Governor Brown in April of this year.  Specifically, Senate Bill 3 will gradually increase minimum wages in California in a manner that is very similar to the Los Angeles and Santa Monica ordinances, except that the state increases will not be complete until 2023.  The first state-wide increase starts next year on January 1, 2017 with a bump to $10.50 per hour for businesses with 26 or more employees, with smaller businesses matching the increase the following year.  The proposed increases for larger businesses are as follows: $10.50 in 2017, $11 in 2018, $12 in 2019, $13 in 2020, $14 in 221 and $15 in 2022; smaller businesses with 25 or fewer employees will have an additional year to raise their hourly rate.

Starting in 2022, future increases in Santa Monica, Los Angeles and in the state of California will be determined based on the adjusted United States Consumer Price Index for Urban Wage Earners and Clerical Workers.

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