The City of Los Angeles announced its new minimum wage which rises to $16.78 per hour (an increase of $0.74 from the current minimum wage of $16.04), on July 1, 2023.
The increase is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers for the Los Angeles metropolitan area, per the Los Angeles Municipal Code.
Employers should note that covered employees are those who in any particular week, perform at least two hours of work within the geographic boundaries of the City of Los Angeles. This includes full-time, part-time, seasonal, or temporary employees. Businesses mainly operating outside of Los Angeles but sending employees into the City for quick calls, drop offs, and site visits should pay close attention.
As a reminder, the City’s minimum wage has no bearing on the minimum salary required for exempt employees. The minimum threshold is determined by the state’s minimum wage (currently $15.50 per hour for all employees.) California’s minimum wage is updated yearly on January 1st.
IRS Mileage Rate
As of January 1, 2023, the Internal Revenue Service raised the mileage rate to 65.5 cents per mile, a three cent increase from the increase implemented in the second half of 2022 because of rising fuel costs. If gas prices increase again, employers may see another spike in the federal mileage reimbursement rate.
This rate is relevant for employers who have California-based employees who travel for work. Reimbursing employees for work-related use of their private vehicles based on the relevant IRS rate creates a presumption that employees are properly reimbursed for these expenses.
Required Notices
Employers are reminded to post notices of current minimum wage rates in a conspicuous place – near water coolers or time clocks, or in break rooms and kitchens – it just needs to be in a place accessible to all employees. Current posters re minimum wage and paid sick leave are available at https://wagesla.lacity.org/ in multiple languages.
E-mailing the notice to all employees is also acceptable.
