July 1st Minimum Wage Increases
Each year on July 1st, a number of local municipalities and the County of Los Angeles raise their hourly minimum wage, based on changes to the consumer price index, and as required by local minimum wage ordinances. In contrast, and as we previously reported here, California customarily issues its annual hourly minimum wage rates each January 1st.
Beginning July 1, 2024, the following increases will apply to employers in the designated areas:
Note that the City of West Hollywood is no longer mandating higher minimum wage rates for hotel employers or for larger employers.
In determining whether a given increase applies, employers should know that it is not where an employee lives, or where an employer is based, that determines the minimum wage that must be paid. Rather, it is where the employee works that determines the minimum wage requirement that should be applied. In many municipalities, if an employee works as few as two hours in the city in a week, that municipality’s minimum wage will apply to the time worked for that week. Employers should also be aware that some of these areas require the posting of a minimum wage notice provided by local authorities.
A Reminder: 2024 Mileage Rates
The 2024 mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes have increased, decreased, or remained unchanged from changes in 2023, when rates were last modified. Specifically, as of January 1, 2024, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:
- 67 cents per mile driven for business use, up 1.5 cents from the 2023 rate;
- 21 cents per mile driven for medical, or moving purposes for active duty members of the Armed Forces, a decrease of 1 cent from 2023; and
- 14 cents per mile driven in service of charitable organizations, unchanged from the 2023 rate.
The IRS standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs. The charitable rate is based on a statute.
Note that taxpayers can calculate the actual costs of using their vehicle rather than using the standard mileage rates when such expenses are deductible.
The rates are important because most employers use the standard rate for business as the reimbursement rate for employees who drive their vehicles in connection with performing work. However, employers should note that, just like deductions for taxpayers, employees can opt to calculate their actual mileage expenses instead of using the IRS rate, subject to proof.
The author would like to gratefully acknowledge the assistance of Joanne Warriner.
