Posted on January 2014 by S. Ward Heinrichs
2014: “The Year of the Minimum Wage!”
For the past several months, my blog, emails, Big Blend Magazine articles, radio interviews, Facebook posts, and other modes of communication I use to discuss legal issues have been filled with news about minimum wage. Of all the hot Employment Law topics, I think minimum wage is the biggest topic now and will remain so throughout 2014.
The big news for Californians is that the state minimum wage will increase from $8 an hour to $9 an hour starting on July 1, 2014. After that, it will increase another dollar to $10 per hour on January 1, 2016.
Most recently in the news, Los Angeles is poised to pass a minimum wage increase to $15.37 per hour for hotel workers who work in a business zone around the airport (LAX). (http://www.huffingtonpost.com/2014/01/14/la-highest-minimum-wage-hotel_n_4590136.html) In fact, the Los Angeles City Council wants to make that minimum wage the law for the entire city. It argues that the present minimum wage does not provide enough income for a wage earner to cover the expenses of a typical family. Of course, Los Angeles businesses are lobbying against it saying that such a large minimum wage increase will lead to significant unemployment because the cost to do business will be too great.
Many in the Federal Government have been pushing a federal minimum wage increase too. Democrats have proposed to increase the national minimum wage to $10.10 per hour. It is now $7.25 per hour. Because of our divided government, the new proposal has very little chance of passing. If it were to pass, then the federal minimum wage would be greater than the minimum wage in all 50 states. That means employers in every state would need to pay at least $10.10 an hour. In contrast, some cities have minimum wages higher than $10.10 per hour. For instance, San Francisco now has a minimum wage of $10.74 per hour. Parts of Seattle have a minimum wage of $15.
Thirteen states have recently increased their minimum wage rates. At the present time, twenty-one states and Washington D.C. have minimum wage rates that are greater than the federal minimum wage, which is now $7.25 per hour. The other 29 states have wage rates that either mirror or are less than the federal minimum wage. Employers in those 29 states must pay at least $7.25 per hour. The state with highest minimum wage is Washington at $9.32 per hour.
Employers must pay the highest minimum wage that applies to them. So, employers in San Francisco must pay the $11.74 per hour rate mandated by the city. If the employer does business just outside of San Francisco, then it must pay the present California minimum wage of $8 per hour. If the employer moves its business to Wyoming, which has a minimum wage of $5.15 per hour, then it must pay its employees the federal minimum of $7.25 per hour.
Some minimum wage laws allow for certain types of businesses to either be exempt from the minimum wage rate or provide for a lower rate than the standard minimum hourly rate. Typically, high city rates have exemptions and limitations built into them.
S. Ward Heinrichs, Esq.
Employment Law Office of Ward Heinrichs
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 408-7543 (fax)