Sacramento Approves City Minimum Wage Ordinance

On October 27, 2015, the Sacramento City Council approved an Ordinance (Ordinance No. 2015-0036) establishing a city minimum wage rate starting at $10.50 per hour in 2017 and eventually reaching $12.50 an hour by 2020. By comparison, the statewide minimum wage rate is currently $9.00 per hour and increases to $10.00 per hour on January 1, 2016.

Sacramento’s scheduled minimum wage rates are:

  • businesses and nonprofits with more than 100 employees:
    • January 1, 2017 – $10.50 per hour
    • January 1, 2018 – $11.00 per hour
    • January 1, 2019 – $11.75 per hour
    • January 1, 2020 – $12.50 per hour
  • businesses and nonprofits with 100 or fewer employees:
    • January 1, 2018 – $10.50 per hour
    • January 1, 2019 – $11.00 per hour
    • January 1, 2020 – $11.75 per hour
    • January 1, 2021 – $12.50 per hour

After that, the City’s minimum wage rate will be adjusted in proportion to the percentage change in the annual Consumer Price Index (CPI).

As originally proposed, the City’s minimum wage plan would have allowed employers to pay less than the scheduled minimum wage if they could prove that their employees made at least $15 an hour with tips but that provision was deemed illegal. Instead, the approved Ordinance will allow employers that pay at least $2 an hour toward health benefits a credit toward the required minimum wage rate. Young workers in job training may also earn less than the scheduled minimum wage rate.

Sacramento is the latest city in recent months to adopt a minimum wage rate plan. Several cities in California’s Bay Area, Los Angeles, Seattle and communities in Maryland have also established minimum wage rates with incremental increases scheduled into later years. Fortunately, employers in Sacramento have over a year to plan and implement the minimum wage rate within their workforce. Sacramento’s employers also will be required to post annually the City’s announcement of the effective minimum wage rate. Employers will be able to obtain the official Minimum Wage Poster from CPC.

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