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San Jose is Latest Silicon Valley City to Increase Minimum Wage to $15 Per Hour

Employers in Silicon Valley now face another local hike in the minimum wage. On Tuesday, the San Jose City Council unanimously approved a multi-year increase in the City’s minimum wage, which will reach $15.00 per hour on January 1, 2019 after increasing in annual $1.50 increments. 

San Jose joins the Silicon Valley cities of Mountain View, Sunnyvale, Los Altos, Palo Alto, and Cupertino to adopt a $15.00 minimum wage in effect in either 2018 or 2019. The municipalities of Campbell, Milpitas, Santa Clara, and Saratoga are also considering similar increases.

The Silicon Valley increases come on the heels of the upcoming increase in California’s state-wide minimum wage that takes effect on January 1, 2017 and will ultimately reach $15 per hour in January 2022. (See Polsinelli’s update on the California minimum wage legislation here). 

San Jose's minimum wage increase will come in four phases: a hike to $10.50 in January 2017, $12.00 per hour in July 2017, to $13.50 in January 2018 and to $15.00 by January 2019. After 2019, the San Jose minimum wage will increase annually based on the consumer price index, with increases capped at 5 percent. The San Jose City Council rejected a more conservative timetable proposed by city staff, which suggested that the minimum wage reach $15.00 in 2020

A city-commissioned study found that the minimum wage increase will have a significant impact on San Jose workers and employers. Notably, the study found:

  • The minimum wage increase will generate “an average pay increase of $3,000 (18 percent of annual earnings) for 115,000 San Jose workers (31 percent of workforce).”

  • While the study anticipates a small 1.3 percent increase in payroll cost across industries, it anticipates a 10.1 percent increase for restaurant employers.

California employers should be mindful of city and county ordinances, as an increasing number of local jurisdictions require minimum wages in excess of California state law. As the minimum wage increases in California, employers should evaluate the salaries of their exempt employees to ensure compliance with all exemption salary requirements tied to the minimum wage. Contact your Polsinelli lawyer for advice on complying with the myriad of state and local wage and hour laws, including the applicable minimum wage.

© Polsinelli PC, Polsinelli LLP in California

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About this Author

Anne Cherry Barnett, Attorney, Polsinelli Law Firm
Principal

With an eye toward being a valued resource and partner to clients, Anne Cherry Barnett approaches each matter with the goal of streamlining costly litigation and achieving the client’s objectives successfully and efficiently. Anne focuses her practice on employment matters and has represented clients of all sizes. She prides herself on providing sound and cutting edge legal strategies that consistently focus on the client’s bottom line as they navigate the complex labyrinth of California and Federal employment regulations. Anne has represented employers in single...

415-248-2102
Associate

Brian Morris is an associate in Polsinelli’s Labor and Employment Litigation practice. He received his J.D. from the New York University School of Law in 2011, where he was a Staff Editor for New York University Journal of Law and Liberty.

Our attorneys have extensive experience providing employers with cost-efficient advice and aggressive defenses on employment and labor law matters. We have represented Fortune 500 corporations and privately owned entrepreneurial firms, and were ranked by Chambers USA in Labor & Employment, May 2016. The practice was also rated as a Standout in both complex and everyday employment litigation in the 2017 BTI Litigation Outlook, based on a survey of more than 300 general counsel at companies with more than $1 billion in revenue.

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