The Los Angeles City Council voted 12-1 Wednesday to give final approval to an ordinance that would increase the minimum wage to $15 per hour by 2020.
The ordinance, which Mayor Eric Garcetti is expected to sign, will require employers of 26 or more workers to increase their minimum hourly wage to $10.50 by July 1, 2016, and then rise in phases to reach $15 by July 1, 2020. Businesses with 25 or fewer workers have an extra year to comply, moving to $10.50 by July 1, 2017.
For restaurants like Los Angeles-based Tender Greens, which has strived to keep hourly rates above the minimum wage to be an employer of choice, the increase will make that positioning more difficult.
“It’s a complicated issue,” said Tender Greens co-founder Erik Oberholtzer. “Going from $9 to $15 in a short time will be very disruptive to the industry.”
Oberholtzer said teens and young adults who may be looking for their first job will likely be squeezed out of the workforce.
“The hope is that, for that wage, you get fair talent, but that isn’t necessarily the experience people are having in the [San Francisco] Bay Area or Seattle,” where the minimum wage is already higher. “I don’t know what restaurants will do that have tougher margins than us.”
After 2020, the city’s minimum wage will be tied to the consumer price index for automatic adjustments for inflation, according to the ordinance.
The legislation, however, may still be altered. City officials are studying proposals like an exemption for unionized businesses, and the impact on workers that may split work time between Los Angeles and other cities.
The ordinance would not apply to several independent cities within Los Angeles, including Santa Monica, Beverly Hills, Burbank and West Hollywood, but the many restaurants in those cities are likely to be pressured to raise wages similarly to compete.
Los Angeles joins a growing number of cities that have adopted a $15 per hour wage, including Seattle and San Francisco.