Compliance Conundrum: What’s the Difference Between an Incorporated and Unincorporated Area?

Location, location, location. When it comes to local employment laws that apply to certain incorporated or unincorporated areas, employers often face the challenge of determining whether a new ordinance applies to their specific workplace location.

Explore the latest Compliance Conundrum article to learn more about:

1. What is Considered an Unincorporated Area?
2. San Mateo County Minimum Wage
3. Bernalillo County Paid Leave
4. Los Angeles County Human Trafficking Prevention

What is Considered an Unincorporated Area?

A great starting point for tackling this month’s conundrum is in Los Angeles County, a jurisdiction where the incorporated and unincorporated headache occurs frequently. Los Angeles County provides a common definition of unincorporated areas on their official website.

They define unincorporated areas as “those communities and areas that are outside the jurisdictional boundaries of incorporated cities.”

Under certain county ordinances, the employment law requirements only apply to employer locations within unincorporated areas. Meaning, the county requirements do not apply to incorporated cities, or municipalities in the county.

Incorporated cities generally have corporate powers, control local public services, and establish their own city council recognized under state law. This holds true with Los Angeles County, where the unincorporated county minimum wage is updating to $17.27 on July 1, 2024, compared to the City of Los Angeles minimum wage rate, which is updating to $17.28, a whopping one cent higher than the county.

Below are three additional examples of how employment laws apply in unincorporated areas and how they may impact other requirements at the city, county, and state levels.

San Mateo County Minimum Wage

San Mateo County, California enacted a minimum wage ordinance that applies to employees who work at least two hours a week within the geographic boundaries of unincorporated San Mateo County. The first minimum wage increase took effect April 1, 2023, subsequently increasing each year based on changes to the applicable consumer price index.

To determine whether or not the San Mateo County minimum wage requirements apply to a particular workplace, an employer must first determine if the physical location falls in an unincorporated area that is outside the jurisdictional boundaries of the incorporated cities in the county.

Incorporated cities in San Mateo County include the following:

• Atherton
• Belmont
• Brisbane
• Burlingame
• Colma
• Daly City
• East Palo Alto
• Foster City
• Half Moon Bay
• Hillsborough
• Menlo Park
• Millbrae
• Pacifica
• Portola Valley
• Redwood City
• San Bruno
• San Carlos
• San Mateo
• South San Francisco
• Woodside

If the physical location of the employer is determined to be outside an incorporated city, the unincorporated San Mateo County minimum wage applies. When the physical location is within one of the above incorporated cities and that city, such as Belmont or Foster City, has passed its own minimum wage ordinance, the applicable city minimum wage rate applies. However, if the incorporated city has not passed its own minimum wage ordinance, California’s state minimum wage applies – not the San Mateo County minimum wage.  

In addition to San Mateo County, Los Angeles County, Santa Fe County, Bernalillo County, and Boulder County all have minimum wage ordinances that only apply to the unincorporated areas of that respective county. It should be noted that not all county minimum wage ordinances apply only to unincorporated areas. For example, Montgomery County, Maryland recently announced their minimum wage rate updates for July 1, 2024, and these updates apply to the entire county, no matter if the location is in an incorporated or unincorporated area. 

Bernalillo County Paid Leave 

While the challenges of tracking legislation for incorporated and unincorporated areas often occur in minimum wage ordinances, the issue also pops up in other local employment laws, such as paid sick leave.  

For example, Bernalillo County, New Mexico, passed the Bernalillo County Employee Wellness Act (the Act), which went into effect on Oct. 1, 2020, and requires covered employers with 2 or more employees to provide paid time off to employees.  

Under the Act, an employee who performs at least 56 hours of work per year for an employer whose physical premises is in the unincorporated limits of Bernalillo County will accrue one hour of paid time off for every 32 hours worked. 

Accordingly, the Act does not apply to employers within the following incorporated cities in Bernalillo County: 

• Albuquerque 
• Los Ranchos de Albuquerque 
• Tijeras 
• Edgewood 
• Rio Rancho 

Of note, employers with workplaces in the above incorporated cities still need to comply with New Mexico’s Healthy Workplaces Act that took effect on July 1, 2022, or any city level paid sick leave ordinances that may pass in the future. Unincorporated Bernalillo County employers should also review New Mexico’s paid sick leave with Bernalillo County requirements to make sure they are providing the most favorable benefits under the law to their employees.  

Los Angeles County Human Trafficking Prevention 

On July 27, 2021, Los Angeles County Counsel adopted the Prevention of Human Trafficking Ordinance, which requires certain employers to post a notice providing human trafficking hotlines and information, as well as provide at least 20 minutes of human trafficking prevention training to new and current employees.  

Per the ordinance, the notice and training requirements only apply to certain businesses in the unincorporated areas of Los Angeles County. Therefore, it does not apply to business locations within the 88 incorporated cities of Los Angeles, or cities such as Los Angeles, Glendale, and Pasadena who have the authority to pass their own city human trafficking prevention requirements. In addition, the ordinance applies only to certain businesses within the unincorporated areas, including, but not limited to, airports, urgent care centers, hotels, restaurants, and gas stations.  

Employers subject to the human trafficking ordinance and in an unincorporated area of Los Angeles County should ensure the Los Angeles County Human Trafficking posting is displayed at the entrances of their establishments.  

GovDocs labor law poster solutions offer Los Angeles County’s human trafficking posting as well as other unincorporated county labor law postings to keep employers up to date with poster compliance. 

Conclusion 

Local employment laws applicable only in the unincorporated areas of a county have increased over the last several years, notably in minimum wage, paid leave, and labor law postings. This trifecta creates the perfect compliance storm for employers. GovDocs can help simplify employment law compliance in all three areas with its Employment Law Compliance Platform, including minimum wage and paid leave management for each specific location and jurisdiction where companies do business.