If you own a business, you’re probably already aware that you need to keep up with federal and state minimum wage laws. But did you know you should also track your city’s minimum wage standards?
The state of California’s 2017 minimum wage is $10 per hour for companies employing 25 or fewer workers and $10.50 per hour for businesses with 26 or more. This rate is set to rise steadily until January 2022 when companies with 26 or more workers must pay at least $15 per hour to nonexempt employees.
However, there are California cities that have implemented minimum wage laws differing from the state, some of which are substantially higher. The 2017 minimum wage rates currently in effect since January 1st are as follows:
- Cupertino- $13.75
- El Cerrito- $12.25
- Long Beach- $10.50
- Los Altos- $12.00
- Mountain View- $13.00
- Oakland- $12.86
- Palo Alto- $12.00
- Richmond- $11.40-$12.30 depending on healthcare benefits and out-of-state income
- San Diego- $11.50
- San Jose- $10.50
- San Mateo- $10.50 for nonprofits and $12.00 for all others
- Santa Clara- $11.10
- Sunnyvale- $13.00
While employers must observe state minimum wage laws, there are certain California cities where the hourly increase has not yet taken effect. Berkeley businesses will not have to raise their wages until October 1st, 2017, from $12.53 to $13.75. The following cities will have to bump their hourly wages up by July 1st, 2017:
- Emeryville- $14.00 if employing 55 or less and $15.20 if employing 56 or more
- Los Angeles city- $10.50 for 25 or fewer employees and $12.00 for 26 or more
- Los Angeles County (unincorporated areas)- $10.50 for 25 or less and $12.00 for 26 or more
- Malibu- $10.50 for 25 or less and $12.00 for 26 or more
- Pasadena- $10.50 for 25 or less and $12.00 for 26 or more
- San Francisco- $14.00
- San Leandro- $12.00
- Santa Monica- $10.50 for 25 or less and $12.00 for 26 or more
If you’re a business in San Francisco or Emeryville be prepared to pay among the highest minimum wages in the state! Emeryville companies must pay their nonexempt employees at least $15.20 if the employee 56 or more workers!
You should be aware that exempt employees’ earnings are affected by changes to the minimum wage. Exempt employees are generally white-collar workers who make discretionary and independent decisions, such as executives, administrators, doctors, and lawyers. In California, employees meeting the criteria for exemption must earn at least two times the minimum wage for full-time employment each month. While certain cities have higher minimum wage requirements than the state, the minimum salary threshold is calculated using the state minimum wage, ignoring individual city rates.
A business could pay thousands or even hundreds of thousands of dollars in back pay, fines, and attorney fees if they do not comply with federal, state, or city minimum wage requirements. Small businesses and growing start-ups are especially vulnerable to legal penalties as they may not have the abundant resources of larger corporations.
Our consultants at ExpertHR are ready to guide California businesses through complex labor and wage laws. Contact us today to create or update your human resources strategy at a cost-savings compared to an in-house department.