Beginning on July 1, 2016, employers in Los Angeles will be required to pay minimum wage far in excess of state minimum wage law.  The minimum wage in LA will be $10.50 per hour as of July 1, 2016, with further hikes scheduled in 2017, 2018, 2019 and 2020.  By 2020, the minimum wage in Los Angeles will be $15.00 per hour — $6.00 per hour more than the current state minimum wage.

Employers won’t be given credit for income employees make from tips or other non-wage benefits.

Small employers (those with 25 or fewer employees) will be given one additional year to comply with the local minimum wage.  The wage hikes go into effect for small employers beginning on July 1, 2017.

The City will staff a new administrative agency to enforce the local minimum wage.  Employees, alone or as groups, will be allowed to file complaints against their employers seeking, among other things, money awards.  The City will have authority to investigate complaints and make awards against employers.  The City will almost certainly also have authority to sue employers who are alleged to be in violation of the City’s minimum wage ordinance.

The ordinance will provide that, starting in 2022, LA’s minimum wage will increase every year thereafter based on the prior year’s Consumer Price Index for the LA metro area.

In approving a local minimum wage measure with these provisions, the City Council soundly rejected input from the hospitality and business community.  The Council approved minimum wage rates that are among the highest in the nation and refused to take into account tip income or non-wage benefits, provide a longer implementation schedule or include other more moderate measures.

Los Angeles employers of all types must prepare now, not only for significantly higher payroll costs but to defend a new variety of civil actions against them – administrative complaints and Superior Court suits for alleged violation of the Los Angeles minimum wage ordinance.

By a 14 to one vote on May 19, 2015, the City Council instructed the City Attorney to draft a minimum wage ordinance as described above.  Once the City Attorney returns with the proposed ordinance, it is clear the Council will approve it.  Mayor Eric Garcetti has promised to sign the ordinance.

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