Local Minimum Wage

What Is Local Minimum Wage?

Local minimum wage refers to minimum wage rates established by cities or counties that exceed the California state minimum wage. California law permits local governments to set higher wage floors within their jurisdictions, and employers must pay whichever rate is highest—federal, state, or local.

This means California employers may face different minimum wage requirements depending on where their employees work, creating compliance complexity for businesses operating in multiple locations.

How Local Minimum Wages Work

The "Highest Rate" Rule

When multiple minimum wage laws apply, the employee is entitled to the highest rate:

Example: An employee works in San Francisco

Federal minimum wage: $7.25/hour
California state minimum: $16.00/hour
San Francisco minimum: $18.67/hour
Employee must be paid: $18.67/hour

Geographic Application

Local minimum wage applies based on where work is performed, not where the employer is headquartered:

Remote employees: Where they physically work
Travel between cities: May require tracking hours by location
Work at customer sites: The location of the work, not the customer

California Cities with Local Minimum Wages

As of 2024, numerous California cities have local minimum wages above the state rate:

Bay Area

City	Minimum Wage (2024)	Annual Increase
San Francisco	$18.67	CPI-based
San Jose	$17.55	CPI-based
Oakland	$16.50	CPI-based
Berkeley	$18.67	CPI-based
Emeryville	$18.67	CPI-based
Fremont	$16.80	CPI-based

Los Angeles Area

City	Minimum Wage (2024)	Notes
Los Angeles	$16.78	Increases July 1
West Hollywood	$19.08	One of the highest
Santa Monica	$16.90	Indexed to CPI
Pasadena	$16.93	CPI-based
Malibu	$16.90	CPI-based

San Diego Area

City	Minimum Wage (2024)
San Diego	$16.85

Other Notable Cities

City	Minimum Wage (2024)
Sacramento	$16.00 (state rate)
Long Beach	$16.00+ (varies by employer size)
Milpitas	$17.20

Compliance Challenges

Tracking Multiple Rates

Employers with employees working in different cities must:

Maintain current rate information for each jurisdiction
Track which employees work where
Update payroll systems when rates change
Post appropriate notices at each location

Rate Change Timing

Local minimum wages often increase at different times:

California state: January 1
Los Angeles: July 1
San Francisco: July 1
San Jose: January 1

Employers must implement correct rates on the effective date for each location.

Traveling Employees

For employees who work in multiple cities:

Track hours by location
Apply the appropriate rate for each work location
Consider using geolocation-enabled time tracking

Local Minimum Wage Ordinance Features

Many local minimum wage laws include additional requirements beyond just a higher rate:

Posting Requirements

Display local minimum wage poster in the workplace
Provide notice in a language employees understand
Update posters when rates change

Notice to Employees

Some cities require:

Written notice of the applicable minimum wage
Information about how to file complaints
Rights under the local ordinance

Anti-Retaliation Provisions

Local ordinances typically prohibit:

Terminating employees for asserting rights
Reducing hours in response to wage increases
Other adverse actions against employees who inquire about rights

Enforcement Mechanisms

Cities may enforce their minimum wage through:

City labor enforcement offices
Private right of action for employees
Penalties paid to the city
Business license revocation

Industry-Specific Local Requirements

Some cities have targeted minimum wage requirements for specific industries:

Los Angeles Hotels

Large hotels (300+ rooms) in Los Angeles have faced higher minimum wage requirements and additional mandates.

Airport Workers

LAX, SFO, and other airports have minimum wage ordinances for workers at or serving the airport.

City Contractors

Many cities require businesses contracting with the city to pay wages higher than even the local minimum.

Employer Best Practices

Maintain a Rate Database

Keep an updated spreadsheet or database with:

Current minimum wage for each location
Effective dates for upcoming increases
Links to source ordinances
Last verified date

Automate Compliance

Use payroll and time-tracking systems that:

Support location-based wage rates
Automatically update when rates change
Track employee work locations
Generate compliance reports

Regular Audits

Quarterly: Verify current rates in your database
Before each increase: Test payroll system updates
Annually: Review which locations employees work in

Employee Communication

Notify employees when rates increase
Update required workplace postings
Train managers on multi-location compliance

When New Local Minimum Wages Take Effect

Stay informed about new local minimum wage ordinances:

Watch for Ballot Measures

Many local minimum wages were enacted through ballot initiatives, which can be harder to predict.

Monitor City Councils

Some cities enact minimum wages through ordinances that can change more quickly.

Join Employer Associations

Business groups often track and communicate upcoming changes.

Penalties for Violations

Violating local minimum wage ordinances can result in:

Back pay owed to employees
Civil penalties (vary by city)
Interest on unpaid wages
Liquidated damages (in some cities, equal to unpaid wages)
Attorney's fees for prevailing employees
Business license issues

Remote Work Considerations

The rise of remote work has complicated local minimum wage compliance:

Work-From-Home Employees

The minimum wage where the employee works (home) typically applies
Employers must track where remote employees physically work
Employees who move may trigger different rate requirements

Hybrid Arrangements

May need to track hours by location
Consider simplified approaches (pay the highest applicable rate)
Document your compliance methodology

Understanding and tracking local minimum wage requirements is essential for California employers, particularly those with employees in multiple cities or those allowing remote work.