Employers With Multiple Locations Need to Carefully Track Minimum Wages

As of July 1, the minimum wage in 10 California cities, as well as Los Angeles County, increased. These include Belmont, Berkeley, Emeryville, Los Angeles, Malibu, Milpitas, Pasadena, San Francisco, San Leandro and Santa Monica. In most cities, employers with 25 or fewer employees pay a slightly lower minimum wage than those with 26 or more employees. In San Francisco, there is a lower minimum wage for a small group of workers classified as “government-supported employees.” The federal minimum wage is $7.25 per hour, though the federal government allows businesses to pay some workers with certain disabilities in certain jobs a sub-minimum wage.

Additionally, there are different minimum wages for those in the service industry who earn tips. Currently, the federal minimum wage for those who earn at least $30 in tips per month is $2.13 an hour.

But that may soon be changing. This month, the U.S. 9th Circuit Court of Appeals ruled that restaurant servers and bartenders must be paid full minimum wage for any time spent on duties for which they cannot earn tips, for example, cleaning or washing dishes after guests have left for the night. This adds a wrinkle for the hospitality industry, which will have to retool its timekeeping.

The ruling is an important reminder that it is essential that employers stay current in their pay practices. State regulators come down hard on employers who try to skirt the law, and see it as their duty to protect easily exploited, low-wage workers. And it creates terrible PR for companies. With revenues in excess of $10 billion, Major League Baseball is currently fighting a suit brought by minor league players who allege that their pay, which can be as low as $1,300 a month, does not meet minimum wage standards. Earlier this year, the huge federal omnibus spending bill included wording that exempted minor league ball players from both minimum wage and overtime pay requirements. Yet the lawsuit continues.

Even the smallest companies need to ensure they are working with the proper legal pay schemes and properly paying minimum wage in the jurisdictions in which they operate, especially if they are in multiple locations. It is too easy for disgruntled employees to complain to regulators, who will respond swiftly. The consequences are serious. Not only will employees win back wages, but they can also collect penalties from employers, as well as attorneys’ fees and court costs. Remain proactive to avoid problems.