As the July 1 deadline approaches, retailers like Walmart and other businesses operating in parts of Southern California are being urged to review local minimum wage requirements.
These changes are set to impact businesses in several cities and unincorporated areas of Los Angeles County, where local wage laws will raise the minimum wage.
Retailers must be prepared to ensure that their workers are paid according to the new, local wage standards to avoid penalties.
Key Changes in Southern California Minimum Wage Rates
The new rules will affect businesses operating in the following areas:
- Los Angeles
- Pasadena
- Santa Monica
- Malibu
- West Hollywood
- Unincorporated parts of Los Angeles County
Employers will no longer be able to rely solely on California’s statewide minimum wage rate, as local wage rates will vary depending on the city or region. This creates a complex landscape for businesses operating in multiple locations, as they will need to verify and adjust pay rates for each employee based on where they work.
Updated Local Wage Rates Starting July 1
Here are the key changes in the minimum wage rates for cities and areas across Southern California:
| Location | New Minimum Wage (Effective July 1) | Previous Rate |
|---|---|---|
| Los Angeles County (unincorporated) | $18.47 per hour | $17.81 per hour |
| City of Los Angeles | $18.42 per hour | $17.87 per hour |
| Pasadena | $18.57 per hour | $18.04 per hour |
| Santa Monica | $18.47 per hour | $17.81 per hour |
| West Hollywood (non-hotel workers) | $20.25 per hour | $20.25 per hour |
| West Hollywood (hotel workers) | $20.87 per hour | $20.22 per hour |
| Malibu | $17.91 per hour | $17.27 per hour |
| San Diego | $17.75 per hour | $17.75 per hour |
Industry-Specific Wage Requirements
The new rules are especially important for businesses in certain industries, particularly those with workers in hospitality, healthcare, and hotel sectors.
Many Southern California cities have specific wage rates for different industries, and these wages may increase on July 1. For example, hotel workers in West Hollywood will see a rise to $20.87 per hour, making it one of the highest rates in the region.
What Employers Need to Do
To comply with these new regulations, businesses must review the minimum wage rates in the areas where their employees work. Companies operating in multiple cities or counties must ensure they are paying the correct rate for each worker based on their work location.
For example, a company with workers in both Los Angeles and Pasadena must pay workers in Pasadena $18.57 per hour, while workers in Los Angeles must receive $18.42 per hour.
Employers should also note that the 2024 PAGA reform provides a potential pathway for reducing penalties if employers can demonstrate they took “reasonable steps” to comply with these new wage laws. This means businesses must not only pay the correct wage but also document their compliance efforts.
Impact on Retailers and Other Businesses
For large retailers like Walmart, the new rules could mean significant changes to payroll systems, especially in regions with higher local wage rates. Retailers will need to make adjustments to ensure they are paying workers in accordance with the local wage laws and avoid penalties for noncompliance.
Prepare Now for July 1
The July 1 deadline is fast approaching, and businesses operating in Southern California need to review the new minimum wage rates in the areas where they operate.
Retailers, hospitality businesses, and employers in industries with industry-specific wage laws must ensure they are in full compliance with the new rules to avoid penalties.
With the PAGA reform offering potential relief for businesses that demonstrate compliance, taking proactive steps to review local pay rates is crucial in this fast-evolving regulatory landscape.
