Update: The New Minimum Wage Law
As usual, the lawmakers have to re-think some of the craziness they put into effect so here we go again. A group of lawmakers have introduced legislation aimed at easing the sting of the new federal overtime exemption regulations that currently are slated to take effect December 1, 2016. Under the new regulations, the minimum annual salary to qualify for exempt status increases over 100% from $23,660 to $47,476. Under proposed legislation dubbed the “Overtime Reform and Enhancement Act”, implementation of the new overtime regulations would be revised to gradually phase in the salary increase over three years, beginning with a 50% increase to $35,984 effective December 1, 2016. In subsequent years, the minimum salary threshold would increase as follows:
• $39,814 effective Dec. 1, 2017;
• $43,645 effective Dec. 1, 2018;
• $47,476 effective Dec. 1, 2019.
The legislation would also eliminate the regulations’ current provision for automatic triennial adjustments to the minimum salary.
Business groups have voiced support for the bill, while the Secretary of Labor quickly voiced strong opposition to the bill. We will keep you posted with developments on this favorable bill.
City of Los Angeles and the UNINCORPORATED areas of Los Angeles County have new minimum wage requirements.
We have been getting a huge number of calls for clarification. If you are in an incorporated city, the law does not apply to you! You can go on the City of Los Angeles’s website and it will give you a list of the INCORPORATED cities. If your city name is on that list the new law does not apply to you. Here is the new law just for clarification.
Effective July 1, 2016, employers with 26 of more employees, must pay employees who perform at least two hours of work within the geographic boundaries of the City of Los Angeles within a particular week at least $10.50 for each hour worked.
Following suit, Los Angeles County’s equivalent minimum wage rate increase schedule also becomes effective on July 1, 2016. Under the Los Angeles County wage ordinance, for employers with 26 of more employees, $10.50 per hour must be paid to employees who perform at least two hours of work in a particular week within unincorporated areas of Los Angeles County.
The equivalent Los Angeles County minimum wage rate increase has created some confusion as to its breadth of application, which only applies to unincorporated areas of Los Angeles County. Incorporated cities in Los Angeles County may have (or will have) their own minimum wage increase schedules and requirements. For example, the City of Long Beach’s set minimum wage increase does not take effect until January 1, 2017 for certain employers.
For the City the Los Angeles and unincorporated areas of Los Angeles County, this new $10.50 hourly rate is an increase from $10.00 per hour for employers with 26 of more employees. For employers with 25 or fewer employees, the minimum wage rate will not increase to $10.50 until July 1, 2017. Thereafter, the minimum wage rate increases will following the below schedules:
For employers with 26 or more employees:
• July 1, 2017: $12.00 per hour
• July 1, 2018: $13.25 per hour
• July 1, 2019: $14.25 per hour
• July 1, 2020: $15.00 per hour
For employers with 25 or fewer employees:
• July 1, 2018: $12.00 per hour
• July 1, 2019: $13.25 per hour
• July 1, 2020: $14.25 per hour
• July 1, 2021: $15.00 per hour
Despite the identical minimum wage rate increase schedules, the City of Los Angeles and Los Angeles County wages ordinances include some differences. For example, under the City of Los Angeles wage ordinance, it permits nonprofit organizations with more than 25 employees to apply for coverage under the small business schedule. Additionally, by example, beginning in July 1, 2022, the minimum wage rate increases will be determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in the Los Angeles metropolitan area under the City of Los Angeles wage ordinance. Under the Los Angeles County wage ordinance, increases will be determined by an adjusted CPI measure.