On January 1, 2019, the state minimum wage increased to $12.00 per hour for employers with at least 26 employees, and $11.00 per hour for smaller employers. The state minimum wage governs the exempt employee threshold salary, which has increased accordingly. The new minimum salary for employees exempt from overtime is $49,920 annually for employers with at least 26 employees, and $45,760 annually for employers with fewer than 26 employees.
Further, a number of California municipalities will raise their minimum wage rates on July 1, 2019. Employers should take care to note these changes because the pace of minimum wage increases in these locations will surpass increases in the California state minimum wage in the race to reach $15.00 per hour.
In determining whether a given increase applies, employers should know that it is not where an employee lives, or where an employer is based, that determines the minimum wage that must be paid. Rather, it is where the employee works that matters. In most of these locations, if an employee works as few as two hours in the city in a week, that municipality’s minimum wage applies to the time worked there.
Southern California municipalities that will raise their minimum wage rates on July 1, 2019, unless another date is noted, are as follows:
Location: | Employers with at least 26 employees: | Employers with fewer than 26 employees: |
City of Los Angeles | $14.25 (currently $13.25) | $13.25 (currently $12.00) |
County of Los Angeles (unincorporated areas) | $14.25 (currently $13.25) | $13.25 (currently $12.00) |
Santa Monica | $14.25 (currently $13.25) | $13.25 (currently $12.00) |
Malibu | $14.25 (currently $13.25) | $13.25 (currently $12.00) |
Pasadena | TBD1 (currently $13.25) | TBD2 (currently $12.00) |
San Diego (increased on January 1, 2019) | $12.00 | $12.00 |
Northern California locations with recent or impending increases in their minimum wage are below. Note that these locations do not distinguish between smaller and larger employers for minimum wage purposes:
San Francisco (July 1, 2018) | $15.00 (subject to CPI increases on July 1, 2019, & each year thereafter) |
Berkeley (October 1, 2018) | $15.00 (subject to CPI increases on July 1, 2019, & each year thereafter) |
Oakland (January 1, 2019) | $13.80 |
Palo Alto (January 1, 2019) | $15.00 |
Richmond (January 1, 2019) | $15.00 |
El Cerrito (January 1, 2019) | $15.00 |
Mountain View (January 1, 2019) | $15.65 |
San Jose (January 1, 2019) | $15.00 |
Santa Clara (January 1, 2019) | $15.00 |
Sunnyvale (January 1, 2019) | $15.65 |
Milpitas (July 1, 2019) | $15.00 |
San Leandro (July 1, 2019) | $14.00 |
Employers should also keep an eye open for changes at the federal level. Effective December of 2016, the U.S. Department of Labor had planned to increase the federal exempt salary threshold from $23,660 to $47,476, but this move was blocked by an injunction. The Department of Labor under the Obama administration appealed the injunction, but the Department of Labor under the Trump administration requested comments in the Federal Register regarding how the salary threshold should be updated and may be close to proposing a new overtime threshold, which is expected to be considerably lower than the $47,476 level previously planned. We will keep you posted on this issue as developments occur.
The author would like to gratefully acknowledge the assistance of Joanne Warriner.
[1] & [2] On or before February 18, 2019, the Pasadena City Manager is required to report on minimum wage impact to the City Council, and as soon as practical thereafter, the City Manager is required to request direction from the City Council whether to institute the following increases: on July 1, 2019, to $14.25 and on July 1, 2020, to $15.00.
This publication is published by the law firm of Ervin Cohen & Jessup LLP. The publication is intended to present an overview of current legal trends; no article should be construed as representing advice on specific, individual legal matters, but rather as general commentary on the subject discussed. Your questions and comments are always welcome. Articles may be reprinted with permission. Copyright ©2019. All rights reserved. ECJ is a registered service mark of Ervin Cohen & Jessup LLP. For information concerning this or other publications of the firm, or to advise us of an address change, please send your request to info@ecjlaw.com.
- Partner
Kelly Scott is a partner and head of the firm’s Employment Law Department.
Mr. Scott is also a member of the Litigation Department and has practiced law since 1987. His areas of practice include representation of employers in all ...
Subscribe
Recent Posts
- New Cal/OSHA Indoor Heat Standards Require New Prevention Measures and Written Prevention Plan | By: Joanne Warriner
- California Bans All Plastic Bags at Grocery Stores | By: Pooja S. Nair
- FTC’s Nationwide Ban on Non-Compete Agreements Stopped by Federal Court Ruling | By: Cate A. Veeneman
- Can the IRS Obtain a Receiver to Help Collect Taxes Owed? | By: Peter Davidson
- Severing Unconscionable Terms in Employment Arbitration Agreements | By: Jared W. Slater
- Can You Collaterally Attack a Receiver’s Appointment?
- Changes to PAGA Create Opportunities for Employers to Minimize Penalties | By: Tanner Hosfield
- Overbroad Employment Arbitration Agreements Will Not Be Enforced in California | By: Jared W. Slater
- LA Al Fresco Deadline Extended | By: Pooja S. Nair
- The Battle for Supremacy: Federal Arbitration Act v. California Arbitration Act | By: Jared W. Slater
Blogs
Contributors
Archives
- October 2024
- September 2024
- August 2024
- July 2024
- June 2024
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- March 2019
- February 2019
- January 2019
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014