Employer Alert: Some Local Minimum Wage Increases to Take Effect July 1, 2017
Currently the California state minimum wage is $10.00 for employers with 25 or fewer employees, and $10.50 for employers with 26 or more employees. Although the next increase in the California minimum wage is still six months on January 1, 2018, a number of local minimum wage hikes are set to take effect on July 1, 2017.
The following is a list of list of the Northern California cities that will be increasing the required minimum wage on July 1st :
- Emeryville: $15.20 for businesses with 55 or fewer employees; $14.00 for businesses with 56 or more employees.
- Milpitas: $11.00
- San Francisco: $14.00
- San Jose: $12.00
- San Leandro: $12.00
El Cerrito, Los Angeles City and County, Pasadena, and Santa Monica are also set to increase their minimum wages on July 1st.
When there are different minimum wage requirements between state, federal, and local governments, the employer must follow the stricter standard (i.e., the one that is the most beneficial to the employee.) Therefore, since California’s current law requires a higher minimum wage rate than does the federal law, all employers in California who are subject to both state and federal laws must pay the state minimum wage rate. Similarly, if a city or county has adopted a higher minimum wage, employees must be paid the city or county wage where it is higher than the state or federal minimum wage rates.
However when calculating salary exemptions and commission exemptions, employers may continue to utilize the State Minimum Wage, which is $10.50.
The biggest pitfall for employers in relation to the changing minimum wages is ensuring that employees that work in two different cities are paid either the higher of the two cities or clearly designate on the pay stub which pay rate was in effect and the hours associated with each pay rate.
If you have questions on how the mid year pay increases will affect your business, please contact Christine H. Long, Employment Law Department chair at Christine.firstname.lastname@example.org or (408) 771-1066.