Today, the Los Angeles City Council voted 13-1 to make the City the largest in the United States to have a minimum wage to $15/hour, a raise which will fully go into effect in 2020. Currently, the minimum wage is $9/hour and it will rise to $10.50/hour on July 1, 2016 for private employers with 25 or more employees (employers with fewer than 25 employees will have an extra year to comply).
There are several other exceptions to the City’s minimum wage increase. It will not apply to not-for-profit corporations so long as any one of the following conditions is met: (1) the chief executive makes less than five times the lowest wage paid to an employee; (2) the company hires transitional employees as part of workforce training programs; (3) the company provides child care; or (4) the company is funded primarily by government grants. Likewise, employees aged 14 to 17 can be paid 85% of the minimum wage for the first 160 weeks.
This comes on the heel of what looks to be a statewide increase in the minimum wage. Earlier this week, the State Senate approved an increase in the state minimum wage to $11/hour on January 1, 2016 and to $13/hour on January 1, 2017.
Undoubtedly, this is part of a national trend — at least on the sate and local levels — as income inequality comes to the forefront of the upcoming presidential election. San Francisco and Seattle have already approved minimum wage increases to $15/hour, Chicago has passed an increase to $13/hour and St. Louis and Kansas City are debating a significant raise.
The City of Los Angeles, however, is far and away the biggest city to make this change. Studies suggest that this ordinance will affect over 500,000 people. And with Congress poised to make no change until at least after the 2016 election, any minimum wage changes will have to take place in state legislatures and city halls.