Happy Monday, and I apologize for the delay.   As I am preparing this draft of my Briefing, my internet is down and I am awaiting AT&T to arrive, but I already suspect that this may well not get sent timely.   However, I used my time wisely this morning to double down on all the July 1 minimum wage and other fun laws that are going into effect for us Californians, since July is just around the corner. 

GET READY FOR JULY 1!! NEW MINIMUM WAGE INCREASES, IRS MILEAGE RATES, AND GENERAL FUN IN WEHO

As many Southern California employers should know, for the first time, the city of Los Angeles and the County of Los Angeles will have different minimum wage rates come July 1, 2022.  Even though I wrote about this a few weeks ago, confused calls and emails from many of you suggest I need to again clarify this issue about the County being in ONLY the UNICORPORATED areas of Los Angeles County. And I promised you a list of the other local cities that were increasing their minimum wages and changing other laws as we approached the deadline.  Well, that time and list is here and now, my friends.  But before we go to that, another announcement.

IRS Raises Mileage Rate to 62.5 Cents per Mile, Effective July 1

Wake up, everyone, is a big one.  This impacts all of you, all over California, probably all over the country.  This is a potential class action, PAGA issue, individual lawsuit issue, you name it.  We all know the obvious reason this is happening.  However, the previous rate for 2022 was 58.5 cents per mile, and last year it was 56 cents.  So while California law does not say you MUST reimburse employees at the current IRS rate, the Labor Commissioner does look to this rate as the suggested reasonable rate, and plaintiff’s attorneys will look at the fact that the federal government’s taxing authority is increasing this rate MID YEAR as a sign that employers should be increasing their reimbursement rate mid-year as well. 

As I have mentioned here several times in the past, if employees drive for work at all beyond their commutes, they must be reimbursed for mileage, pursuant to Labor Code Sec 2802.  Failure to do so might also be seen as a minimum wage violation, if the employee makes anywhere close to minimum wage, even under federal labor law in other parts of the country.  We therefore highly recommend that if you have employees using their pesonal vehicles to drive for work that you adjust the rate you are paying for mileage reimbursement in light of the IRS’ adjustment going into effect in July.

Minimum Wage – City of Los Angeles: $16.04 

So back to minimum wage. Effective July 1, 2022, employers of all size must pay employees who work at least two hours per week in the city limits of Los Angeles at the rate of $16.04 per hour.  They must also post a new poster.

Minimum Wage – City of Pasadena: $16.11 

Effective July 1, 2022, employers of all size must pay employees who work at least two hours per week in the city limits of Pasadena at the rate of $16.11 per hour.  They must also post a new poster.

Minimum Wage – City of Malibu: $15.96 

Effective July 1, 2022, employers of all size must pay employees who work at least two hours per week in the city limits of Malibu at the rate of $15.96 per hour.  They must also post a new poster.

Minimum Wage – City of Santa Monica: $15.96 

Effective July 1, 2022, employers of all size must pay employees who work at least two hours per week in the city limits of Santa Monica at the rate of $15.96 per hour.  They must also post a new poster.

Minimum Wage – UNINCORPORATED County of Los Angeles: $15.96 

Effective July 1, 2022, employers of all size must pay employees who work at least two hours per week in any unincorporated areas of the County of Los Angeles at the rate of $15.96 per hour.  They must also post a new poster.  Again, check where your employees work.  Hollywood is in the CITY of Los Angeles.  So is Woodland Hills.  Westlake Village, Marina Del Rey, parts of Valencia outside of Santa Clarita, you may slide into those nebulous areas of unincorporated LA County.  But these are rare.  Most of Los Angeles County falls within either Los Angeles City or one of the other 87 cities, like one of the cities listed here OR a city like Burbank, Beverly Hills, Long Beach, Glendale, Santa Fe Springs, Downey, who does not have its own minimum wage.  If that is the case, you stay at the state wage, which will be $15.00 until January 1, when it goes to $15.50.   I know this is confusing, so call (310.730.4397) or email if you have questions. 

West Hollywood – You are Special. 

You already got one wage hike in January.  Now you get another, and you’re getting another in January, 2023.   For July 1, 2022, employers of 49 or fewer employees: $16:00, and employers of 50 or more: $16.50.  Unless you are a hotel, then hold on to your bedposts and see below.

But that’s not all.  As of July 1, WeHo employers must also provide paid AND unpaid leave to their employees.  It’s a complicated leave policy, and we are in the process of polishing up a formal written policy for you all to implement in your employee handbooks.  I would not recommend trying this one on your own. It’s nasty.  Essentially, the paid time off wraps in sick time, vacation time and personal time, for a total of 96 hours.  Then there is an allotment of 80 hours of unpaid leave time.  That might seem simple enough, but the rules about accrual and usage are pretty intricate, and on face value, they are not totally consistent with state law, but of course, they do need to comply with state law, which is going to make execution a nightmare.  The rules for part-time and full-time are also different, which as usual, will present a challenge for employers who have employees with flexible hours (which will be most of my clients in West Hollywood).  So, lots of fun to be had here.  Deep breaths, we will slog through this one together. 

Also, for hospitality clients located in WeHo, do not forget that the rules impacting how service charges must be handled already went into effect as part of this statute first of the year.   Those of you in Santa Monica have already worked through this service charge loveliness; tell the folks in West Hollywood how they manage this part.

There is also a crazy high minimum wage of $18.35 effective July 1 for hotel employees in West Hollywood, and that definition of hotels is a pretty broad.  If you are anywhere near this definition, do not try to skirt this.  I do believe they will enforce this liberally; it is West Hollywood and the intent will be to cast a wide net.

Minimum Wage Increases in Northern California:

We don’t want our friends in Northern California to think we have forgotten about them.  And they have not forgotten about their employees.   Effective July 1, 2022, the following municipalities also have increases (and most also have posters!):

Alameda:  $15.75

Berkeley:   $16.99

Emeryville: (always a contender for highest in the land) goes to $17.68

Fremont:   $16.00

Foster City: $15.75

Milpitas:  $16.40

In addition to WeHo, both Long Beach and Los Angeles have special hotel employee rates that go up in July, respectively to $16.73 and $18.17.

Well, that timing worked out.  The AT&T person just came, repaired, and went.  So I get to hit send, only a few hours late. 

For those of you I got to see in person at the Elizabeth Burns (now once again) Annual Los Angeles Restaurant Association Dinner – it truly meant so much to see you and give you great big hugs after all this time.   Virtual hugs and hope to see more of the rest of you in person soon.  Do try to stay safe, because COVID is still making the rounds.  Continue to call if you have questions about your employees being out. 

And remember to keep being patient with yourself and the world around you.   We are all still a society in recovery.

#StandWithUkraine