Just two weeks after the new minimum wage laws went into effect, some employers have been taken by surprise at their broad scope.  This is what you need to know about the City of Los Angeles ordinances and how they affect businesses outside of the City limits:

Minimum Wage was Raised to $10.50 in Areas Outside of Los Angeles

Last year, most employers learned from the media (or the muffled screams of their comrades) that Los Angeles passed a Minimum Wage Ordinance increasing both minimum wage and mandatory paid sick leave.  The ordinance went into effect on July 1, 2016.  Many were prepared for minimum wage to rise from $10.00 to $10.50 and for sick leave days to increase from 3 per year to 6 on that date, but did not realize that the scope of increases extended far outside of the City of Los Angeles proper.

The fact is, though they were less publicized, the County of Los Angeles, and other cities throughout California, implemented their own, separate wage ordinances, designed to correspond with Los Angeles’.  As a result all unincorporated cities in the County of Los Angeles will mirror Los Angeles’ minimum wage requirements. The minimum wage for workers in these other cities is also $10.50, now and it will increase incrementally to $15.00 by the year 2020.   A list of unincorporated cities within the County of Los Angeles is attached.  Employees who work in these cities, though some are miles outside of Los Angeles, are all subject to the same wage increase.

The City’s ordinance provisions doubling employee sick days from 3 to 6, however, were not adopted by the County of Los Angeles.  Therefore, employees outside of the City of Los Angeles do not earn more sick days per year[a].  That part of the City of Los Angeles ordinance does not have widespread reach into other cities.

Summary of Los Angeles Minimum Wage Ordinance

All employers who employ 26 or more employees are subject to the ordinance.  Smaller employers (with 25 or fewer workers) have a one year reprieve, before being required to pay the higher rate.  The Minimum Wage ordinance applies to any non-exempt employee who performs at least two hours of work in a particular week within the City of Los Angeles (or an unincorporated city within the County of Los Angeles, please see the attached list), for an employer.

Bottom Line:  If an employee works 2 hours in the City of Los Angeles in a week, he must be paid the Los Angeles Minimum Wage (even if he works outside of Los Angeles for the remainder of that week).  For example: if an employee works 2 hours in the City of Los Angeles the week of July 11, 2016 and 30 hours in Fresno that week, he must still be paid the Los Angeles Minimum Wage for all 32 hours.  But even if he is a Los Angeles resident, if he does not work in Los Angeles (or in an unincorporated city in the county) at all the following week (or works there less than 2 hours that week), the ordinance does not apply.

Sick Pay Coverage Under the Ordinance:

Employees who work for an employer for 30 days or more in the City of Los Angeles within a year of hire are entitled to all of the sick leave benefits. Leave accrues from the first day of employment or from July 1, 2016, the date the ordinance took effect, whichever is later. Similar to California law, the Employer can require that employees wait until the 90th day of employment before using accrued sick leave.

Also be aware that an important difference between the Los Angeles ordinance and state sick pay is that the employees in the City of Los Angeles don’t have to take the sick time in minimum increments of 2 hours.

The Sick Pay increases required by the ordinance only effect employment in the City of Los Angeles and do not extend to work in other areas of the County.  In determining whether the ordinance applies, please keep in mind that there are areas of Los Angeles commonly referred to by other names that are actually part of the City of Los Angeles. Examples include Century City, San Pedro, Hollywood, and Studio City, among others. You can look up zip codes at Zimas.lacity.org if you are unsure of whether a particular location is technically part of the City of Los Angeles or not.


Minimum Wage Increases in Other Cities
Several California cities have their own, independent minimum wage orders.  Here is an overview:
California City Minimum Wage Ordinance
Berkeley $11.00, will increase to $12.53 on October 1, 2016
El Cerritos $11.60
Emeryville $13.00 (55 or fewer employees), $14.82 (55 or more)
Long Beach $10.00 (will increase to $10.50 in 2017)
Mountain View $11.00
Oakland $12.55
Palo Alto $11.00
Pasadena $10.50
Richmond $11.52
Sacramento $10.00 (increased to $10.50 effective January 1, 2017)
San Diego $10.00 minimum wage and sick leave to increase January 1, 2017
San Francisco $13.00
San Jose $10.30
Santa Clarita $11.00
Santa Monica $10.50 with sick pay increases in 2017
Sunnyvale $11.00

[a] An exception would be Cities like San Diego and Santa Monica where voters have passed their own sick pay ordinance.

Should you have any questions about the scope or application of the new Los Angeles Minimum Wage Ordinance, please do not hesitate to contact Bradley, Gmelich & Wellerstein LLP at (818) 243-5200.