Minimum Wage Law in California as of July 1, 2019
Wage and hour laws set the basic standards for pay and time worked—covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act. California also has its own wage and hour laws, and some local governments (like cities and counties) do, too. An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in California, which has a higher minimum wage, must pay the higher amount.
On January 1, 2019, many California employees woke up with a raise. The state raised the minimum hourly wage to $12 for large employers (26 employees or more) and to $11 for small employers (25 employees or fewer). Six months later, on July 1, 2019, several California counties and municipalities added to these minimum wage increases. Typical of the state, the amount of the increase varies widely by city and county, with some but not all local governments making a distinction between large and small employers. Of particular note, hotel workers in places like Long Beach, Los Angeles (city and county), and Oakland are now entitled to wages much higher than the minimum wage for all other types of employees.
Employers need to remember that even if their business is not located in a city or county with a minimum wage or paid sick leave requirement, this does not mean the company can ignore the new laws. Most of the ordinances require compliance with local laws if any employee works two hours within its jurisdiction even if the employer is not based within that city or county. For example, Santa Monica law applies to any employee working a minimum of two hours within Santa Monica in a given week (even if the employer is located outside of Santa Monica). In Los Angeles (city), the ordinance applies to “[a]n employee … who performs at least two hours of work in a particular week within the City of Los Angeles….” In LA County, “[a]nyone who works at least two hours in a one-week period within the unincorporated areas of Los Angeles County is entitled to the County minimum wage for the hours worked in the unincorporated area of the County.”
California employers should review a few other items to ensure the increase in the minimum wage has not caught them off guard. Here are five reminders to start the process of ensuring compliance with the July 1 deadline:
- Ensure the company understands which city and county they are located within.
Many of the cities and counties provide resources to help companies determine if they are located within the city’s or county’s jurisdiction. For example, the City of Los Angeles provides this resource.
- Ensure employees who travel and work in other cities and counties are being paid the appropriate minimum wage.
Employers should review the various jurisdictions that their employees visit for work in order to ensure compliance with their requirements.
- Update posters to ensure the compliant posters are being used in the workplace.
Many local cities and counties have issued updated posters to reflect the increased minimum wage as of July 1, 2019. Employers should review to ensure they are using the most current versions of the posters as of July 1, 2019.
- Update notices to employees who are hired on or after July 1, 2019.
Notices to Employee required under Labor Code section 2810.5 must be issued to all nonexempt employees when they start work. The wage information section must reflect the higher minimum wage for minimum wage workers as of July 1, 2019. Accordingly, the overtime rates of pay section of the Notice must also be updated to reflect the higher rates as a result of the higher minimum wage requirements.