Employers in select California locations should be prepared for the mandated minimum wage increases slated for July 1st, 2017.

The minimum wage in the city of Los Angeles will jump to $12 an hour next week, as part of a climb to a $15 minimum wage, officials said. It is the second year of a city increase that will eventually reach $15 an hour by July 1, 2021.

To the north, also effective July 1, 2017, the San Francisco minimum wage salaries must increase from $13.00 per hour to $14.00 per hour. This will increase once again on July 1, 2018, when San Francisco’s minimum wage rate will be $15.00 per hour.

These minimum wage rates are significantly higher than the state of California’s minimum wage rate of $10.50 per hour for those businesses with more than 25 employees. However, California will increase the minimum wage rates for those employers by $1 at the beginning of each year until the base rate reaches $15.00 an hour by January 1, 2022.

California Labor Law: Minimum Wage increases Tend to Lead the Nation

According to an article from International Business Times, the top five states with the highest minimum wages:

5. In California, the minimum wage is currently $10.50.

4. In Massachusetts, the minimum wage is currently $11 per hour.

3. In New York, the current minimum wage is $11.

2. In Washington state, the minimum wage is also $11.

1. In Washington, D.C., the minimum wage is currently $11.

As noted previously, the California minimum wage, currently $10.50 for workers at companies with 26 or more employees, will rise 50 cents on Jan. 1, 2018 to put it on par with the other higher-paying states. 

Other locations that are raising the minimum wage on July 1, 2017:

Montgomery County, Maryland: From $10.75 to $11.50.

Chicago, Illinois: From $10.50 to $11. It will increase to $13 by 2019.

Cook County, Illinois: Increases to $10. It will reach $13 by 2020.

(Source: www.businessforafairminimumwage.org)

According to the mandates of the California labor law, the state’s minimum wage will increase one dollar each year until it reaches the level of $15 an hour in 2022. During this time, the governor can temporarily suspend the increases under certain economic or budgetary conditions.

After 2022, the minimum wage will be indexed to inflation.

The $10.50 an hour required salary base currently only applies to businesses employing 26 or more workers. The current minimum wage for employees at California firms with 25 or fewer employees is $10 per hour, and those employers will not have to pay the $15 per hour rate until 2023.

At the current rate, full-time minimum-wage workers in California, in larger companies, earn $21,840 annually. A 50-cent increase will translate into an extra $1,040 per year for those workers.

July 1st Minimum Wage Increases for Other California Cities

In Emeryville, the minimum wage increases on July 1, 2017. For employers with 55 or fewer workers this will be $14.00 an hour. For large businesses with 56 or more employees, it will be $15.20 hourly.

July 1, 2017 also marks a minimum wage pay increase in Santa Monica to $12.00 an hour.

Along with the city of Los Angeles, Los Angeles County employers with less that 26 employees will pay $10.50, but those with 26 or more will begin paying $12.00 an hour minimum wage. This, too, will occur on July 1, 2017.

Pasadena, too, will mirror Los Angeles with the same pay increases except that their's will apply to all employers. This increase will also begin on July 1st. 

For many of these cities, the increases will "cap out" in three to five years, with periodic increases based on the Consumer Price Index, as needed. In addition, on the state level, the current legislation allows the governor to pause increases for a year if there are relevant budget or economic factors.

Staying Compliant With Labor Law Requirements

New regulations, such as minimum wage requirements, often increase both the costs and the risks for employers, requiring new workplace postings or changes to existing workplace policies. Because of this, it is recommended that all employers consult with experienced employment counsel to ensure compliance.

In addition, new management and compliance practices are required for every HR and every payroll professional. All of this can become burdensome and time consuming. But there are options.

Accuchex, a reputable payroll and workforce management services provider, can not only relieve you of the burden of your ongoing payroll process demands, but can potentially provide other cost-effective solutions, as well.

Call Accuchex Payroll and Workforce Management Services at 877-422-2824 to get your free Payroll Outsourcing Guide, or click the button below and let us help you learn more about your labor law compliance needs.