Los Angeles City Council Approves Minimum Wage Hike to $15 Per Hour by 2020

In a 12 to one vote on Wednesday, June 10, 2015, the Los Angeles City Council approved a measure that will incrementally increase Los Angeles’ minimum wage to $15.00 per hour by 2020.  Los Angeles joins San Francisco, Berkeley, Oakland, Richmond, and San Jose as California cities which have recently enacted minimum wage hikes.  Los Angeles is now the largest city in the United States with a plan to increase its minimum wage to $15.00, surpassing San Francisco and Seattle.  In order to become law, the measure must be approved by Mayor Eric Garcetti, which Garcetti is expected to do.

Starting in July 2016, the minimum wage in the City of Los Angeles will be $10.50, with increases to $12.00, $13.25, $14.25, and $15.00 to follow annually each July.  After the wage reaches $15.00 in 2020, increases in the minimum wage will be tied to the Consumer Price Index.

Employers with 25 or fewer employees and non-profit businesses will receive a one year delay to comply with each of the increases.

In acting quickly to get this measure on the books, the City Council left some questions unanswered.  Specifically, the City Council did not address whether unions would be allowed to negotiate sub-minimum wage rates for its workers, whether restaurants would be restricted from adding surcharges to offset the increase in costs, and how out-of-town companies with workers who travel to Los Angeles would be affected.  The City Council is expected to address these concerns in the coming weeks.

Employers in the City of Los Angeles and surrounding areas should stay tuned as more details are expected to emerge once the proposed ordinance is signed by the Mayor.  The State minimum wage currently stands at $9.00 per hour and is set to increase to $10.00 per hour on January 31, 2016.

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