Minimum Wage Ordinance

Santa Monica has a minimum wage law as of July 1, 2016.  The law provides for annual wage rate increases as shown below, reaching $15.00 per hour on July 1, 2020.  Smaller businesses (less than 25 employees) and qualifying nonprofits have an additional year to comply with the new law.

The wage for hotels and businesses operating on hotel property is $13.25 as of July 1, 2016, and will match the Los Angeles hotel wage at $15.66 per hour on July 1, 2017.  

The sick leave provision of the law is effective as of January 1, 2017. Santa Monica workers can earn up to 32 hours (small businesses) and 40 hours (larger business), as shown in the graphic below.  The provision increases for 40 hours (small businesses) and 72 hours (larger businesses) on January 1, 2018.

The ordinance also includes service charges, first-time worker, and enforcement provisions, and a limited exemption for employers providing transitional jobs.  To apply for the Transitional Jobs exemption, please email minimum.wage@smgov.net.  


NEWS:  First Conviction in Santa Monica Minimum Wage Enforcement Case


Legal Notices

Employers must post Santa Monica notices.

  • At a minimum, employers must post Santa Monica's legal notices in English and Spanish.  
  • Businesses must also post notices in any other language spoken by five percent or more of the employer's workforce.  
  • Legal notices are available for download below.  Please contact minimum.wage@smgov.net to request the legal notices in an additional language.  

REQUIRED LANGUAGES

OTHER LANGUAGES

Wage Rate & Paid Sick Leave Tables

Minimum Wage Rates

(as of July 1 each year)
YearBusinesses with 26 or more employeesBusinesses with 25 or fewer employeesAll Hotels
2016 $10.50 $10.00
(CA State Minimum Wage)
$13.25
2017 $12.00 $10.50 $15.66
2018 $13.25 $12.00 Aligned to City of LA Hotel Wage; increases annually by CPI
2019 $14.25 $13.25
2020 $15.00 $14.25
2021 $15.00 $15.00

Sick Leave Provisions

(as of January 1 each year)
YearBusinesses with 26 or more employeesBusinesses with 25 or fewer employees
2017 40 hours 32 hours
2018 72 hours 40 hours

Notes: Employees accrue one hour for every 30 hours worked. Employers can provide leave up front, and employer plans can be more generous.

Resources

The links below provide a set of resources in English and Spanish.  Additional business and employee resources are at the Education & Enforcement page.

Downloadable Resources (English)

Click to download a zip file including:

  • Fact Sheet
  • Legal Notice
  • Frequently Asked Questions
  • Paycheck Insert
  • Flyers/Posters
  • Paid Sick Leave Checklist for Businesses
  • Must do/ Should do for Businesses
  • Enforcement Guide for Businesses/ Employees

Descargar los Recursos (Español)

Haga clic para descargar un archivo zip que incluye:

  • Hoja de Datos
  • Aviso Legal
  • Preguntas frecuentes
  • Inserción de cheque de pago
  • Folletos / Carteles
  • Guía de Aplicación para Empresas / Empleados

Media Kit

Click to download a zip file including:

  • Press Releases
  • Wage and Paid Sick Leave graphics (English and Spanish)

Complying with Other Minimum Wage Laws

The State of California and the City and County of Los Angeles also have minimum wage laws. Santa Monica employers are responsible for complying with both the Santa Monica ordinance and County and State requirements, where those are more generous.

Details of the Ordinance

General Minimum Wage

Businesses must comply with the local minimum wage starting July 1, 2016. The Santa Monica wage rates, schedules, and small business and nonprofit organization delays match those of Los Angeles City and County.

  • Phased increase to reach $15 in 2020 for most businesses
  • One-year delay ($15 by 2021) for businesses with 25 or fewer employees
  • One-year delay ($15 by 2021) for qualifying nonprofit organizations
  • Limited exemption for transitional employers
  • Limited exemption for first-time workers (85% of local minimum wage for first 160 hours)
  • Limited exemption for employees subject to a collective bargaining agreement.

Hotel-Worker Living Wage

The hotel-worker wage is based on Santa Monica’s commitment to supporting a vibrant and equitable tourism industry in parity with the region/Los Angeles hotel wages.

  • Applies to all hotels, apart from Santa Monica’s youth hostels
  • Includes a one-year hardship waiver provision for hotels that would need to reduce employment by more than 20% or reduce hours by more than 30% to avoid bankruptcy
  • Applies to businesses that contract, lease, or sublet on hotel property or provide services on hotel property
  • Limited exemption for employees subject to a collective bargaining agreement.

Paid Sick Leave

The Santa Monica ordinance requires paid sick leave for full-time, part-time, and temporary employees. Note that paid sick leave benefits are greater than the State Requirements.

  • Employers must comply starting January 1, 2017 (before this date, comply with State law).
  • Accrual rate is one hour for every 30 hours worked.
  • Accrual limits are as follows:
    • Jan. 1, 2017:  32 hours for small businesses (25 or fewer employees); 40 hours for larger businesses (26 or more employees).
    • Jan. 1, 2018:  40 hours for small businesses; 72 hours for larger businesses
  • Employees can carry over accrued sick leave annually (calendar year, fiscal year, or hiring date) up to the accrual cap.
  • Employers can provide sick leave at the start of the year as a whole rather than by accrual, as long as this provides leave consistent with the required accrual amounts.
  • Other sick leave plans will comply if equal to or more generous than the ordinance.
  • Sick leave use follows AB 1522 guidelines.

Service Charges

Santa Monica’s ordinance requires that employers who collect service charges from customers must pay the entirety of those charges to the workers who performed those services.

  • Service charges can be shared between front and back of house apart from hotel banquet/catering, porterage, and delivery charges.
  • Healthcare surcharges must be spent entirely on workers and follow specific guidelines.
  • Employers must provide clear notice to customers of the charge and its use.
  • Employers must share with employees how they distribute service charge proceeds, and must keep records of service charge revenue receipts and spending.

First-Time Workers

Employees working for the first time in an activity in which they have no previous similar or related experience can earn 85% of the minimum wage for the first 160 hours of employment.

  • This is the same language as the State “learner” provision.
  • City staff can provide further guidance regarding what constitutes similar or related experience, if needed.

Enforcement

The ordinance prohibits retaliation against employees for rights protected under the minimum wage law, and provides that employers cannot reduce employees’ hours or other benefits to directly fund the wage increase.  Employees have the right to file civil claims, and employers violating the law can be subject to administrative or criminal penalties.

FAQ

General Wage

What is the new minimum wage law?

The law applies to businesses operating in Santa Monica, and covers any employee that works an average of two (2) hours per week in the City.  It provides additional wage and sick leave benefits and other protections for Santa Monica employees and labor law requirements for Santa Monica businesses.  The Special Provisions section provides information about the law’s hotel wage, sick leave, service charges, first time workers (learners), and enforcement provisions.

What are the general minimum wage rates?

The first increase will be to $10.50 per hour starting July 1, 2016 for businesses with 26 or more employees.   

The table below shows the minimum wage rate schedule in the new law, reaching $15 per hour on July 1, 2020.  Employers with 25 or fewer workers will have an additional year to comply.  Starting July 1, 2022, the rate will increase annually by the consumer price index (CPI).

Year*Businesses 26+ employeesBusinesses under 25 employees
2016 $10.50 **$10.00
2017 $12.00 $10.50
2018 $13.25 $12.00
2019 $14.25 $13.25
2020 $15.00 $14.25
2021 $15.00 $15.00

*Rate effective July 1 each year

**CA state minimum wage

Is this the same as the Los Angeles minimum wage rate?

Yes, the City and County of Los Angeles share the same wage schedule, with the one-year delay for smaller businesses.  

Is this the only wage rate change or requirement?

No. Hotels and hotel related businesses (an employer that contracts, leases, or sublets premises connected to the hotel and operated in conjunction with the hotel, or that provides services at the hotel) must pay a hotel living wage starting July 1, 2016.

What is the difference between the Federal, State (CA), and Santa Monica minimum wage?

Santa Monica employers must comply with Federal, State, and Santa Monica minimum wage laws.  Where there is a conflict, employers must follow the law that is most beneficial to the employee.  Since Santa Monica’s minimum wage is higher than the State and the Federal minimum wage, employers must follow Santa Monica’s law, unless an exemption applies (see Deferrals and Exemptions below).  Exemptions include employees who work under a collective bargaining agreement, and those exempt under State labor law. 

When does the minimum wage ordinance take effect?  When will I be responsible for complying?

Businesses must comply with the minimum wage rate starting July 1, 2016, and with sick leave provisions starting January 1, 2017. 

Who will be enforcing the minimum wage law?  Are there punishments for not complying?

Santa Monica will designate an agency to enforce its minimum wage law; this may be through LA County’s Wage Enforcement Program (WEP).  The State will continue to enforce some wage claims where appropriate.  Businesses are subject to administrative citations and criminal prosecution for non-compliance, and employees have the right to bring civil claims against businesses on their own behalf.  The Enforcement section contains more information.

What was the process for voting on this law?  Did the City Council consider impacts on businesses?

City Council began discussing a Santa Monica minimum wage law in September 2014, when Los Angeles Mayor Garcetti announced the LA minimum wage plan, and formally directed staff to research and prepare a proposed law in July 2015.  Since that time, staff has worked with subject matter experts, Santa Monica businesses and community business partners including the Santa Monica Chamber of Commerce and Santa Monica Travel and Tourism, workers, and the community to receive input on the law, and has made adjustments to proposals in response to this feedback. 

You can find more information about the process, and view related community meetings, City Council discussions, and reports and research on the City’s minimum wage page. 

Who has to comply with the law?

All businesses located within Santa Monica and with employees entitled to payment of a minimum wage under California minimum wage law must comply.  The law applies to any employee working a minimum of two hours within Santa Monica in a given week, so employers located outside Santa Monica but whose employees perform work in Santa Monica satisfying that requirement must also comply with Santa Monica’s ordinance.

Workers not entitled to minimum wage payment under California law are also exempt from the local law.  These exemptions apply to certain categories of workers including independent contractors, learners (for a limited time), in-home support services, and certain disabled workers.  For further information on these categories of workers, please consult the Industrial Welfare Commission wage orders (http://www.dir.ca.gov/iwc/WageOrderIndustries.htm) and/or the Division of Labor Standards Enforcement (http://www.dir.ca.gov/DLSE/dlse.html).

Federal, State, County, City, and School District employees abide by different laws.

What if I work in Santa Monica, but I live somewhere else?

You must be paid the Santa Monica minimum wage rate.

Does the law apply to full-time and part-time workers?

Yes, it applies to both full-time and part-time workers. 

I am part of a union.  Does the new wage apply to me?

Yes.  Santa Monica’s ordinance is a minimum labor standard and a law of general application that applies to all employees covered by the ordinance, whether represented by a union or not.  However, per Santa Monica Municipal Code Section 4.62.045, the ordinance provisions may be waived by a collective bargaining agreement.  The waiver must be in a bona fide collective bargaining agreement, must be express, and must be in clear and unambiguous terms. The parties to a collective bargaining agreement are free to negotiate any language they desire, and the City will not interfere with or participate in the negotiation of such language. 

What if I have other questions about the law?

You can review the City’s resources online at www.smgov.net/minimumwage, email the City at minimum.wage@smgov.net, or call the information line at (310) 458-8281.  

Deferrals and Exemptions

Is anyone exempt from the minimum wage law?

Yes.  The law does not apply to certain employees who do not qualify for minimum wage payments under California law.  The minimum wage law also does not apply to employees participating in a collective bargaining agreement.  Santa Monica’s ordinance also contains limited exemptions for some nonprofit organizations, transitional employers, and first-time workers. 

Are there different rules for small businesses?

Yes.  Businesses with 25 or fewer employees (determined by the average number of employees employed per quarter during the previous calendar year) have a one-year delay in the minimum wage (see wage rate table), and a lower number of sick days (see sick leave section) than larger businesses. 

I have a small office in Santa Monica, but belong to a company with many locations.  Do I qualify for the smaller business one-year delay?

Please refer to Santa Monica Municipal Code Section 4.62.015(h). Your eligibility for a one-year delay will depend on both (1) the relationship of your office in connection to the company, and (2) the number of employees working in Santa Monica. Multiple employers that form a single integrated enterprise are considered a single employer if so deemed under the Fair Labor Standards Act (FLSA). In addition, the employee count (for purposes of determining 26 or more, versus 25 or fewer) is based on the number of employees fitting the Employee definition, meaning those individuals who perform at least two hours of work in a particular week within Santa Monica (see Municipal Code Section 4.62.010(c)).

Do nonprofits also need to comply with the law?

Yes.  However, nonprofit organizations that meet any one of the following conditions can apply for a waiver to delay the minimum wage implementation by one year.  All nonprofits with 25 or fewer employees will qualify for the small business delay, and do not need to apply for a one-year delay.

  1. The chief executive officer earns a salary that, when calculated on an hourly basis, is less than five times the lowest wage paid by the Nonprofit Corporation; or
  2. The Nonprofit Corporation is a Transitional Employer; or
  3. The Nonprofit Corporation serves as a child care provider; or
  4. The Nonprofit Corporation is funded primarily by City, county, state or federal grants or reimbursements.

How can I apply for a nonprofit deferral? 

Please contact the City at minimum.wage@smgov.net to request an application form.

What defines a transitional employer?  If I believe that I qualify, how can I apply for an exemption?

A Transitional Employer is a Nonprofit Corporation that provides Transitional Jobs (short-term, wage-paying, subsidized employment in a nonprofit corporation that combines actual work, skill development, and Supportive Services) for the long-term unemployed. 

Please contact the City at minimum.wage@smgov.net to request an application form.

Special Provisions (Hotel Wage, Service / Surcharges, Paid Sick Leave, First-Time Workers)

Hotels

What is the hotel minimum wage?   When does it take effect?

Hotels and hotel related businesses (an employer that contracts, leases, or sublets premises connected to the hotel and operated in conjunction with the hotel, or that provides services at the hotel) must pay the hotel wage starting July 1, 2016.  The hotel wage schedule is below.  Starting July 1, 2017, the Santa Monica hotel wage will match that of the City of Los Angeles, which will be $15.66 per hour.  Thereafter (from 2018 onwards), the wage will increase by the annual CPI and both Santa Monica and Los Angeles hotel minimum wage rates will be aligned.  The annual rates will be posted on our website.

Santa Monica Hotels
(excludes hostels)
7/1/2016 $13.25
7/1/2017

$15.66

Why do hotels / hotel workers have a different requirement?

Tourism is one of the largest industries in the City and in the entire region, and having a uniform living wage for hotel workers regionally promotes equity and benefits in both the local and regional economy. 

Is the hotel wage the same as Los Angeles?

It will be the same starting July 1, 2017.  The one-year delay is to provide our Santa Monica hotel employers the same amount of time as in Los Angeles to plan for the wage increase.  The Santa Monica wage is different only in that it applies to hotels of all sizes, where the Los Angeles hotel wage applies to hotels of 100 rooms or greater.

Are any hotels exempt?

The law does not apply to youth hostels. 

Hotels can also apply for a one-year waiver under the Santa Monica Municipal Code Section 4.63.020.  To qualify for the waiver, a hotel must demonstrate that compliance with the increased wage would lead to either a 20% decrease in its workforce or a 30% decrease in employee total hours to avoid bankruptcy or shut down.   An external review or audit would establish these conditions, and an applying hotel must notify its employees. 

I am part of a union.  Does the new wage apply to me?

Yes.  Santa Monica’s ordinance is a minimum labor standard and a law of general application that applies to all employees covered by the ordinance, whether represented by a union or not.  However, per Santa Monica Municipal Code Section4.63.045, the ordinance provisions may be waived by a collective bargaining agreement.  The waiver must be in a bona fide collective bargaining agreement, must be express, and must be in clear and unambiguous terms. The parties to a collective bargaining agreement are free to negotiate any language they desire, and the City will not interfere with or participate in the negotiation of such language. 

Service Charges

Employers
My restaurant charges customers service charges.  Will I need to change my current process?

Yes, most likely, per Santa Monica Municipal Code Section 4.62.040. The law requires service charge proceeds to be distributed to employees generally contributing to the customers’ service (including back of house staff). Service charge proceeds cannot be distributed to employees whose primary roles are managerial or supervisory. Employers are also required to disclose in writing their plan for service charge distribution and report to employees the amount of service charges collected.  The business cannot deduct credit card processing fees or costs from the employee’s distribution.

The law also addresses transparency concerns for the customer:  employers must clearly disclose all service charges to customers before they make a purchase or selection.

Lastly, the employer cannot automatically include any optional charge in a bill.  If the charge is optional, a customer must write it in.

My restaurant uses a healthcare surcharge to offset employee health care costs.  Do I need to change my current process?

Yes, most likely, per Santa Monica Municipal Code Section4.62.040 (a)(1). The law requires that healthcare surcharges be deposited within seven days of collection into segregated accounts controlled exclusively by employees, such as (but not limited to) Flexible Spending Accounts, Health Savings Accounts, or Premium-Only Cafeteria Plans; or be paid to Employees in wages.  

 The law also addresses transparency concerns for the customer.  Employers must clearly disclose all healthcare surcharges to customers before they make a purchase or selection.

My restaurant operates on a tipping model.  Do I need to change my current process?

No, per Santa Monica Municipal Code Section 4.62.040(i), the law does not apply to any tip or gratuity.

What records do I need to keep?

Businesses that use any type of service charge are required to maintain records related to this type of business activity for three years from the date of the charges being collected.

My hotel has an established service charge sharing model for porterage, catering, and room service.  Do I need to change this?

No, per Santa Monica Municipal Code Section 4.62.040 (2)(C), employers that had, prior to July 1, 2016, an existing practice of pooling and distributing the service charges for porterage, catering, and room service may continue to do so.

Employees
I receive some income from service charges.  Will anything change for me?

Yes, possibly.  Employers may decide to distribute service charges to more or different staff than they have in the past, and will need to distribute 100% of proceeds to employees.

I receive tips in addition to my regular check.  Will anything change for me?

The law will not impact your tips:  per Santa Monica Municipal Code Section 4.62.040(i), the law does not apply to any tip or gratuity.  However, the amount of your tips may change if your employer chooses to use a service charge, which would alter the distribution of the charge.

My employer redistributes service charges but I’m not sure how or who receives the money.  Is this right?

No.  The law requires employers to disclose the service charge distribution plan in writing to employees, and to report this distribution on employee pay checks. 

Paid Sick Leave

When is the effective date?  Is it the same as the minimum wage law?

Businesses must comply with sick leave requirements starting January 1, 2017.   

How many paid sick days does the law require?

The law requires employers to provide at least the hours below. 

 

Year
(Effective on Jan. 1)
Businesses with 26 or more employeesBusinesses with 25 or fewer employees
2017 40 hours 32 hours
2018 72 hours 40 hours
How is this different from State law?  Is the accrual rate the same?

The accrual rate (one hour for every 30 hours worked) is the same as under State requirements.  Under Santa Monica’s law, employees can accrue more paid sick leave than under State law.  And, unlike State law, Santa Monica’s ordinance does not include annual accrual or use requirements.

What if the State and Santa Monica laws are different?

If there is a conflict, the employer must abide by the law that is most generous to employees. 

Will paid sick leave hours roll over from year to year?

Yes. Any unused sick leave will roll over up to the cap of 40 hours or 32 hours (starting January 1, 2017), and 72 or 40 hours starting January 1, 2018 and thereafter. The rollover can be on fiscal or calendar year, or anniversary date.

As a business can I provide required sick leave up front?

Yes.  You can provide the required paid sick leave days at the start of the year (calendar year, fiscal year, or anniversary date) rather than by accrual as long as you satisfy the law’s minimum requirements.  If you provide the sick leave up front, you do not need to roll over unused sick leave from year to year.

Is there a limit to the total number of paid sick leave days an employee can take in a year?

Yes, please see the chart above.  If an employer provides sick leave up front, this effectively limits the days an employee can use during the year, as this is the total sick leave allocation.  If an employer has employees accrue sick leave over time, employees can take up to the amount they have accrued at any time (following the first 90 days of employment).  The employee can never accrue more than the cap, so can never take more than that amount at one time (unless the employer has a more generous policy). 

Does the law require that employers compensate employees for unused hours (provide cash out for unused hours)?

No.

What about part-time employees?   How does the law apply?

Part-time employees will accrue paid sick leave at the same rate as full time employees.  If your employees accrue time off, they will continue to accrue up until they reach the maximum of 72 or 40 hours, whether or not that takes place within a year.  If you provide sick leave up front, you must provide the maximum required, even if that employee would not have earned those days in a year under the accrual method. 

First-Time Workers

I just got a new job.  How does the new law apply?

If your new job is a position in which you have no previous similar or related experience, then your employer could pay you at 85% of the local minimum wage for the first 160 hours of your employment.  Following 160 hours, the employer must pay you the general minimum wage rate.

I earned below the minimum wage last summer.  I now have a new summer job, can my employer pay me below minimum wage again?

Only if your role is different enough to satisfy the requirement of similar or related experience.  If you are working in your same or similar job duties, the employer must pay the general minimum wage. 

Enforcement

How will the City enforce the minimum wage law?

The City plans to contract with Los Angeles County to process wage enforcement claims and conduct primary investigation of any claims. Wage enforcement hearings and appeals of administrative citations will follow the City’s administrative hearing process (Santa Monica Municipal Code Chapter 1.09).  The City will handle any criminal prosecution.

Employers
How can I find out the new ordinance requirements?

You can download the ordinance at www.smgov.net/minimumwage; or in the City’s Municipal Code.

The City has also prepared workplace notices to fulfill legal posting requirements and other information and resources, including an online toolkit with posters, flyers and pay stub notices, which you can find at www.smgov.net/minimumwage.  Employers can print the legal notice from the website to post in employee break rooms or other prominent areas.

The City will be contracting with local organizations to assist with business outreach efforts which will include workshops. Check the website for upcoming notices.

Will the City provide resources so that I can post information for employees?  Where can I find these?

Yes.  The City will provide these at www.smgov.net/minimumwage in the Employer Resource section.

Employees
What types of activities are illegal for employers under the new law?

Any activity that goes against the minimum wage law regulations is illegal.  Illegal activities include:

  • Payment below the required wage rate
  • Failure to provide required sick leave
  • Failure to provide records of service charge distribution
  • Failure to distribute service charges to employees
  • Retaliation for asking about or requesting employers fulfill new wage requirements.

If you have questions about whether an activity is legal, you can contact the City.  You can also email at any time to minimum.wage@smgov.net.

The City plans to contract with community organizations to provide employee outreach and education services which will include workshops. Check the website for upcoming notices.

Can my employer fire me for asking about the new law?

No.  This would be retaliation and is illegal under the new law. 

This is intended as general information only and does not carry the force of legal opinion.  The information is provided as a public service.

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