Next Challenge for California Employers: Increase in Minimum Wage Starting July 1, 2020 | Chugh LLP

Next Challenge for California Employers: Increase in Minimum Wage Starting July 1, 2020

Practice Areas

By: Shagun Parekh

Summary

As many California employers begin to slowly recover from the economic impact of the coronavirus (COVID-19) pandemic, they will need to brace themselves for an additional challenge. While the federal minimum wage has not changed for more than a decade, California employers are facing a hike in minimum wages across several cities and counties as of July 1, 2020.

State of California Minimum Wages

California’s July 1, 2020 minimum wage increases are local ordinances that only impact certain cities and counties. These increases are separate from annual minimum wage increases at the state level.

California state minimum wage is set to increase every year until it reaches $15.00/hour in 2022 for large employers or 2023 for businesses with 25 or fewer employees. The schedule provided by the Department of Industrial Relations serves as a good tracker.  

Schedule for California Minimum Wage Rates, 2020-2023

Date

 (25 Employees or fewer)

(26+ Employees)

January 1, 2020

$12.00/hour

$13.00/hour

January 1, 2021

$13.00/hour

$14.00/hour

January 1, 2022

$14.00/hour

$15.00/hour

January 1, 2023

$15.00/hour

Local Minimum Wage Increases in California

Cities and counties within California have passed local ordinances to increase minimum wage rates. Most of them are going ahead as planned even amidst the COVID-19 economic downturn. Starting July 1, 2020, minimum wages in some cities and counties will increase to the following rates (this list is not exhaustive):

Locality

Wage/hour

Alameda

$15.00

Berkeley

$16.07

Fremont

$13.50 (25 or fewer employees); and

$15.00 (26 or more employees)

Los Angeles

(county)

$14.25 (25 or fewer employees); and

$15.00 (26 or more employees)

Milpitas

$15.40

Novato

$13.00 (25 or fewer employees); 

$14.00 (26 to 99 employees); and

$15.00 (100 or more employees)

San Francisco (county)

$16.07

San Leandro

$15.00

Santa Rosa

$14.25 (25 or fewer employees); and

$15.00 (26 or more employees)

Some California localities have considered delaying their minimum wage increases due to the pandemic. Hayward and San Carlos counties have voted to delay the increase, but to date no motion has passed to implement the delay. Other cities have minimum wage ordinances scheduled for implementation in January 2021.

What Should Employers Do?

  1. Employers in impacted cities and counties should ensure that their workplace minimum wage postings reflect their updated local rate.
  2. Employers should check local ordinances to ensure compliance and pay the correct rate.
  3. Employers also need to ensure that their practices are in line with applicable ordinances based on their business size, industry, organization type, and other factors.

Stay Updated

For any questions about the application of this minimum wage increase ordinance where you conduct business, reach out to us at info@chugh.com for more information. We also encourage you to forward this alert to your contacts who might benefit.

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