In the wake of a debate over increasing the federal minimum wage, two Northern California cities voted to increase their local minimum wage rates during the recent midterm elections. On Tuesday, November 4, 2014, San Francisco became the second U.S. city to raise its minimum wage to $15.00 per hour, while Oakland raised its minimum wage to $12.25 per hour.
In San Francisco, voters widely approved the ballot measure. With 77% of the vote in favor, the City will gradually raise its minimum wage from its current rate of $10.74 per hour. Under the new law, wages will rise to $12.25 per hour in May 2015 and, thereafter, will increase every year until the minimum wage rate reaches $15.00 per hour in July 2018. After that, annual increases will be tied to a cost-of-living calculation. This election decision in San Francisco follows Seattle’s approval this past June to raise its minimum wage rate to $15.00 per hour, the highest level in the U.S. However, Seattle’s increase in minimum wage rate to $15.00 per hour will not be completed until 2021. San Francisco’s ballot measure covers nearly all workers in the city, exempting only youths under 18 in government-subsidized training programs or people over 55 at some government-subsidized nonprofits.
Meanwhile, in Oakland, voters approved its ballot measure with 82% voting in favor. There, the city’s minimum wage rate will be increased from its current hourly rate of $9.00 to $12.25 per hour in March 2015. Oakland’s minimum wage rate then will increase each year after 2015 based on cost-of-living increases. Oakland’s measure also includes provisions requiring employers in the city to offer a minimum of at least five days of sick leave to all employees. Joining workers in San Francisco and other cities across the country, employees in Oakland now will accrue one hour of paid sick leave for every 30 hours they work. Employers may cap paid sick leave earned by an employee at 40 hours for employees of “small businesses” (employers who normally have fewer than 10 workers) and 72 hours for employees of other employers.
Employers in these two cities should be prepared to comply with the new minimum wage requirements. In addition to the damages and penalties for minimum wage violations that employees already are entitled to pursue under the California Labor Code, San Francisco’s ballot measure imposes additional consequences on employers for their failure to comply with the new minimum wage requirements. As a result, such employers can be held responsible for back wages “unlawfully withheld,” as well as the payment of penalties in the amount of $50 to each employee for each day of the violation, reinstatement in employment, and/or injunctive relief, reasonable attorneys’ fees and costs, and interest.
In addition, Alaska, Arkansas, Nebraska and South Dakota all approved proposals to raise their states’ minimum wage rate as well. Those states’ proposals will raise their minimum wages to between $8.50 per hour and $9.00 per hour. Currently, 23 states and Washington, D.C. have minimum wages above the federal minimum wage of $7.25.