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Santa Monica Finalizes Minimum Wage Ordinance

April 27, 2016 6:05 PM

Santa Monica Finalizes Minimum Wage Ordinance

SANTA MONICA, Calif. — July 1, 2016 marks the first day that Santa Monica will have a local citywide minimum wage.  This change is part of Santa Monica’s efforts to foster an economic environment that supports all workers.  Phased in over four years, the minimum wage will start at $10.50 per hour in 2016, rising to $15.00 per hour in 2020. There will be a one year delay for businesses with 25 or fewer employees and for qualifying nonprofit organizations, and transitional employers will have an 18-month exemption. The hotel minimum wage will start at $13.25 per hour in 2016, rising to match the Los Angeles Hotel Minimum Wage in 2017 at $15.37 per hour plus a consumer price index increase. The Minimum Wage Ordinance also includes paid sick leave, service charge, first-time worker, and enforcement provisions. Visit smgov.net/minimumwage for wage and paid sick leave schedules and to see how Santa Monica’s community contributed to the law’s development.

“Affordability is one of the City’s five strategic goals and increasing the minimum wage is a big milestone in our pursuit to preserve Santa Monica as an inclusive, affordable and diverse community,” said Mayor Tony Vazquez. “This will have a direct impact on workers’ lives, especially those in the service industry. Families will have a little more, which offers more of an opportunity to build a strong future.”

Minimum Wage Law Highlights

  • Starting January 1, 2017, Santa Monica workers will begin to earn additional paid sick leave beyond State requirements, reaching 72 hours for larger businesses and 40 hours for smaller businesses by January 2018. Accruals carry over annually, up to the accrual cap. Employers can provide sick leave plans that are more generous than the minimum requirement.
  • Employers collecting service charges must distribute 100% of the proceeds to employees, which can include back of house workers. Heathcare-related surcharges must also be distributed to employees in segregated accounts or as wages. Employers must clearly describe service charges to customers, must share how revenue is distributed with employees, and must maintain service charge distribution records.
  • Matching the State law, employees working in a job activity for the first time can earn 85% of the minimum wage for the first 160 hours of employment.
  • Employers cannot retaliate against employees for rights protected under the minimum wage law, including reducing employees’ hours or other benefits directly related to the minimum wage increase. The enforcement portion of the ordinance also includes penalties for noncompliance, and offers flexibility in penalty assessment, as well as an emphasis on employer outreach and education.

This law, with the amendments adopted last night, represents over eight months of work with a diverse and inclusive group of stakeholders, including employers, workers, advocacy groups, community members, and subject experts.  Council’s action in adopting the amended ordinance incorporated unanimous recommendations from a Minimum Wage Working Group made up of community members representing the various stakeholder groups that was formed to address Council’s final concerns after the law’s January 12, 2016 adoption. 

For more information on the Minimum Wage Ordinance, visit smgov.net/minimumwage.

Employers that have questions about the Minimum Wage Ordinance should contact the LA County DCBA at wagehelp@dcba.lacounty.gov.

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