Anyone paying attention to national politics knows increasing the minimum wage is a hot topic  being debated by employee and business groups.  While the debate rages, the Sacramento City Council decided not to wait for the feds or the state to act, and recently voted 6-3 to increase the Sacramento city minimum wage, as follows:

  • $10.50 in 2017
  • $11.00 in 2018
  • $11.75 in 2019
  • $12.50 in 2020

Employers should also be aware of the following quirks in the new law:

  • Small businesses, defined as 100 employees or fewer, are on a schedule that is one year behind the timeline above.  For small businesses, the $10.50 increase goes in effect in 2018, $11.00 in 2019, and so on.
  • Employers will also receive a credit of up to $2.00 per hour by providing qualified health care benefits.  So, in 2020 for example, if the employer is providing health care benefits to employees, the employer can pay $10.50 per hour instead of $12.50 per hour (assuming $10.50 per hour still complies with federal and state minimum wage laws in 2020).

The Sacramento City Council considered, but rejected, exemptions to the minimum wage increase for workers under age 18, for developmentally disabled employees, and for workers who earned more than $15.00 per hour when tips, bonuses and commissions were counted.

Labor unions have already vowed to challenge the $2.00 health benefits credit, so the debate over minimum wage in Sacramento is likely far from over.