Los Angeles Minimum Wage Increase Approved by Committee, Heads to City Council for Vote
Raises the Wage to $15 by 2021,
Gives Small Businesses Time to Adjust
LOS ANGELES- Today, the City Council’s Economic Development Committee approved a comprehensive, citywide minimum wage increase, which will raise the minimum wage in Los Angeles to $15.00 an hour by 2021, including an additional one-year “phase in” period before any increases for small businesses. Councilmember Paul Krekorian proposed the overall architecture of this final minimum wage proposal, including the more gradual increases for small businesses, which was adopted by the committee.
“I’m proud of this minimum wage policy and I’m confident that my City Council colleagues will support it,” said Krekorian. “We are showing that Los Angeles is ready to tackle the problem of income inequality by increasing the minimum wage for tens of thousands of hardworking Angelenos, while also building in protections for the overwhelming majority of small businesses. This is a fair solution that balances the needs of working families, who are faced with high rents and low pay, and business owners, who need certainty to continue to create jobs and grow our local economy.”
FACTS
Under this policy, all workers in the City of Los Angeles will be entitled to receive at least $15 an hour minimum wage on July 1, 2021. Average annual earnings will increase over that period by 30.2 percent.
Approximately 89 percent of businesses in the city will get an additional year (until July 1, 2017) to plan and prepare before any wage increase kicks in, followed by moderate wage increases for their employees.
Right now, 38 percent of the city’s workers earn less than $13 an hour.
More than 600,000 workers will see a significant wage increase with this plan.
According to the Economic Roundtable, Los Angeles workers would receive $7.6 billion more a year in pay with a $15 minimum wage.
Below is the minimum wage policy adopted by the committee today. The full City Council will vote on the policy soon.
LOS ANGELES MINIMUM WAGE POLICY ADOPTED
BY THE CITY COUNCIL’S ECONOMIC DEVELOPMENT COMMITTEE
WAGE SCHEDULE
Beginning July 1, 2016, the minimum wage in the City of Los Angeles will be as follows:
2016: $10.50
2017: $12.00
2018: $13.25
2019: $14.25
2020: $15.00
Increases will happen on July 1 of the calendar year. Starting on July 1, 2022, the minimum wage will be indexed to CPI—a number that will be calculated by averaging CPI over the previous 20 years. That amount will be announced on Jan. 1 of each year.
SMALL BUSINESS WAGE SCHEDULE
Businesses with 25 or fewer employees will receive an additional year to phase in the City’s minimum wage, putting all businesses on the same wage scale on July 1, 2021.
2017: $10.50
2018: $12.00
2019: $13.25
2020: $14.25
2021: $15.00
NOTE: To determine a business’s size, the City will average the number of employees working for that business over the previous calendar year.
YOUTH WAGE
Workers between the ages of 14 and 17 will receive 85 percent of the City’s minimum wage or the state minimum wage, whichever is higher, for a maximum of 160 hours.
NON-PROFITS
Non-profits will adhere to the City’s wage schedules set forth above. Organizations that employ 25 or fewer people will receive the additional phase in year like other small businesses.
Some non–profits that meet specific criteria to be set forth by the City will be allowed to apply for a waiver. Application dates will be between Aug. 1 and Nov. 1, 2015. Acceptance of the waiver will allow those non-profits to be on the small business wage schedule. The waiver will be administered by the Bureau of Contract Administration.
TIPPED EMPLOYEES
Businesses that traditionally employ tipped workers will adhere to state law.
The City will require any mandatory service charge collected by the employer to go directly to the employees.
MONITORING
The Chief Administrative Officer and Chief Legislative Analyst will commission a study of the minimum wage implementation, beginning in 2018. The study will review the state of the City’s economy, the impacts of the minimum wage and the effectiveness of wage theft enforcement. The CAO and CLA will continue to collect data on these areas in 2019 and 2020.
ENFORCEMENT
The City Council will budget $500,000 in FY 2015-2016 to create the Office of Labor Standards. This will fund five investigators and outreach efforts. The OLS will report to the City Council within 180 days of formation with recommendations related to additional resources necessary to implement the program, including any additional resources needed for public outreach and development of partnerships with local organizations.
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Los Angeles City Councilmember Paul Krekorian, chairman of the Budget and Finance Committee and vice-chair of the Economic Development Committee, represents Council District 2, which includes North Hollywood, Studio City, Valley Village and other communities in the east San Fernando Valley. His website is cd2.lacity.org, where you can sign up for news updates. Visit him on Twitter (@PaulKrekorian) or Facebook: