L.A. and Chicago: New City Minimum Wages

More Major Metropolises Launching Own Minimum Wages

The Los Angeles City Council directed the City Attorney to prepare a minimum wage ordinance that will raise the minimum wage in stages to $15 per hour by 2020. The L.A. City Council is expected to approve the final ordinance in July 2015, and it would take effect July 2016. The L.A. draft ordinance follows closely on the heels of the Chicago Minimum Wage Ordinance that goes into effect July 1, 2015, raising the minimum wage for Chicago workers to $10 per hour and then increasing to $13 by 2019.

BREAKING UPDATE 6/13/2015: It’s official! L.A. Mayor signs L.A. Minimum Wage into law.

Chicago Minimum Wage

The Chicago Minimum Wage Ordinance takes effect July 1, 2015 and establishes a $10 per hour rate with incremental increases to $13 per hour in 2019.

Prior to this ordinance, the City did not require a posting notice; however, the new Minimum Wage Ordinance requires employers to post a notice prepared by the City, which was just released and is required to be posted by July 1, 2015.

Beginning 2020, the Chicago minimum wage rate will be indexed to the Consumer Price Index (CPI). One item of note for employers in restaurant and hospitality: the tipped minimum wage rate for Chicago business becomes indexed to the CPI in 2017, earlier than the non-tipped rate.

GovDocs Compliance Research Counsel, Anne Jakala, Esq. said that because the new posting includes the minimum wages for 2015 through 2019, GovDocs doesn’t anticipate a new posting to be released each year until 2020 and beyond.

City contractors and subcontractors should be aware that Mayor Rahm Emanuel signed an Executive Order (2014-1) requiring all City of Chicago contractors and subcontractors to pay their employees a minimum of $13 per hour for work performed under a City contract.

Los Angeles Minimum Wage

The Los Angeles Minimum Wage Ordinance amends the L.A. municipal code to establish a citywide minimum wage and a wage enforcement division. The new L.A. minimum wage takes effect July 1, 2016 with a beginning wage of $10.50 per hour. The ordinance delays the start of the minimum wage rate by one year for employers with 25 or fewer employees. Beginning July 1, 2022, the L.A. minimum wage will be indexed to the CPI and adjusted annually.

Chicago and Los Angeles Minimum Wage Schedule

Both Chicago and Los Angeles are increasing their minimum wage rates incrementally.

2015

2016

2017

2018

2019

       2020
Chicago (July 1) $10.00 $10.50 $11.00 $12.00 $13.00 INDEXED
Los Angeles (July 1) NA $10.50 $12.00 $13.25 $14.25 $15.00

Chicago and Los Angeles Minimum Wage Posting Requirements

Both Chicago and Los Angeles require employers to display a minimum wage posting. L.A. requires their posting to be displayed:

“…in English, Spanish, Chinese (Cantonese and Mandarin), Hindi, Vietnamese, Tagalog, Korean, Japanese, Thai, Armenian, Russian and Farsi, and any other language spoken by at least five percent of the Employees at the workplace or job site.”

Additionally, Chicago requires employers to provide notice to individual employees with the first paycheck. In Los Angeles, every employer must provide each employee at the time of hire, the Employer’s name, address, and telephone number in writing.

GovDocs Compliance Research Counsel, Anne Jakala, Esq., said that employers with workers in Los Angeles can hold tight for now in terms of searching for a new L.A. minimum wage posting.

“The first of the gradual raises does not come until July 2016. Therefore, we do not expect postings from the Division until that time. However, it does appear that this posting will be updated every year after that point.” Anne Jakala, Esq.

U.S. City Posting Requirements

More than 40 municipal governments in the U.S. have issued notices that employers must display in workplaces – and the trend is increasing. Cities like San Francisco, Seattle, Albuquerque, and Philadelphia have all issued ordinances that affect workers in those cities with corresponding labor law postings.

GovDocs provides ongoing labor law posting compliance coverage for North America’s largest employers. Under our Update Program, employers receive the latest Federal, State, and City required postings automatically and at no extra charge. This takes the guesswork out of posting compliance for large companies with locations in multiple cities and states.

 

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