1 STAFF REPORT
DATE: November 19, 2024
TO: Justin Hess, City Manager
FROM: Patrick Prescott, Community Development Director VIA: Simone McFarland, Assistant Community Development Director Mary Hamzoian, Economic Development Manager
BY: Marissa Cardwell, Senior Administrative Analyst
SUBJECT
: First Step Report on Potential Taskforce for Citywide Minimum Wage and Paid Parental Leave
RECOMMENDATION
Note and file.
BACKGROUND
At the January 9, 2024, Council Meeting, Council Member Anthony requested a first step report on a potential taskforce related to minimum wage and paid parental leave for private employers within the City.
Minimum wage laws vary across states and counties , with some municipalities electing to enact additional increased minimum wage laws at their discretion. In recent years, neighboring cities including Los Angeles City, Pasadena, Santa Monica, and West Hollywood have enacted minimum wage laws that supersede the S tate’s current hourly pay rate. The City of Los Angeles implemented a task force prior to passing their own minimum wage law within the city. Additional cities outside of California utilize a task force for the purpose of assessing minimum wage include Chicago and Seattle. The State of California has an existing paid parental leave policy, which is followed by most cities in California. Staff is not aware of any local cities with active task forces dedicated to minimum wage and/or family leave.
DISCUSSION
Minimum Wage
In January 2022, California became the first state to implement a $15.00 minimum wage, an 87.5% increase over its $8.00 level in early 2014. In the same period, 38 California
COMMUNITY
DEVELOPMENT
2 localities raised and indexed their minimum wages above the State level. As of January 1, 2024, the State minimum wage is $16.00 an hour for all employees. As of January 1, 2025, California's minimum wage will increase by 50 cents to $16.50 per hour.
Businesses within Burbank are currently subject to paying the minimum wage as established by the State of California. With the passage of Assembly Bill 1228 and Senate Bill 525, new sections have been added to the California Labor Code which increased the minimum wage for all fast-food workers and some healthcare workers. Beginning April 1, 2024, fast food employees receive a S tate minimum wage of $20 .00 per hour. As of October 16, 2024, healthcare employees in various facilities receive minimum wage ranging from $18 .00 to $23.00 per hour depending upon the type of care facility.
Additional increases for healthcare facility workers are also in process , with a planned implementation date of January 1, 2025.
On November 5, 2024, California voters considered California ballot measure Proposition 32, which if passed, will raise the S tate’s current minimum wage to $17.00 for the remainder of 2024 for employers with at least 26 employees, increasing to $18.00 per hour starting in January 2025. Small businesses with fewer than 26 employees would be required to start paying employees $17.00 an hour in January 2025 and $18.00 per hour in 2026. As of this writing (November 14
th), the passage of the ballot measure is still not
resolved with 51% voting “no” and 49% voting “yes”. The California Secretary of State is expected to certify the election results on December 13, 2024.
Other cities across the S tate have adopted their own local minimum wage ordinances, and many have been in effect for several years. Some of t hese ordinances have differentiated between large (26 or more employees) and small (less than 26 employees) employers using the State’s definition. For example, effective July 1, 2024, the minimum wage for all employers in unincorporated Los Angeles County and the City of Los Angeles is $17.28 an hour (Figure 1). Additional details for neighboring cities with local minimum wage ordinances can be reviewed on the chart below.
Location Minimum Wage Effective Date
State of California $16.00 January 1, 2024
Los Angeles County
(Unincorporated Areas) $17.27 July 1, 2024
City of Burbank* $16.00 January 1, 2024
City of Los Angeles $17.27 July 1, 2024
City of Malibu $17.27 July 1, 2024
City of Mountain View $18.75 January 1, 2024
City of Pasadena $17.50 July 1, 2024
City of San Diego $16.85 January 1, 2024
City of Santa Monica $17.27 July 1, 2024
City of West Hollywood $19.08 July 1, 2023
Figure 1: Local Minimum Wage by County/City
*Burbank does not have a local minimum wage ordinance and follows State established minimum wage
3 Paid Family Leave (PFL)
As of 2020, t he State of California’s current paid parental leave policy allows eligible employees to receive up to eight weeks of PFL to bond with a new child, whether through birth, adoption, or foster care placement. The PFL is ‘job-protected’ under the California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA), meaning employees can return to their job after leave. The leave can be taken at any time within the first 12 months of a child entering the family. Citizenship and immigration status do not affect eligibility.
Eligibility requirements for the use of PFL by employees include but are not limited to having earned at least $300 in wages during a base period and contributing to State Disability Insurance (SDI) or a voluntary plan in lieu of State Disability Insurance.
Employees working in public service do not qualify for the State’s PFL as they do not contribute to the State Disability Insurance program.
State Disability Insurance and PFL provide wage replacement benefits only; they do not provide job protection. Disability Insurance and Paid Family Leave do not change the federal or State leave laws in any way and are separate from them. In addition to wage replacement benefits, employees in California may be protected under other employee leave laws, such as the Family Medical Leave Act (FMLA) or the California Family Rights Act (CFRA).
Family and Medical Leave Act
FMLA is a federal law that provides eligible employees of covered employers with unpaid, job-protected leave for specified family and medical reasons. Eligible employees may take up to 12 work weeks of leave in a 12-month period for one or more of the following reasons:
• The birth of a child or placement of a child with the employee for adoption or foster care, and to bond with the newborn or newly placed child; • To care for a spouse, child, or parent who has a serious health condition, including incapacity due to pregnancy and for prenatal medical care; • A serious health condition that makes the employee unable to perform the essential functions of his or her job, including incapacity due to pregnancy and for prenatal medical care; or
• Any qualifying exigency arising out of the fact that a spouse, child, or parent is a military member on covered active duty or call to covered active-duty status.
FMLA applies only to ‘covered’ employers including all public agencies (inclusive of state, local, and federal employers ), local education agencies (schools) , and private sector employers who employ 50 or more employees for at least 20 work weeks in the current or preceding calendar year . Covered employers must provide FMLA benefits and protections to eligible employees and comply with other responsibilities required under the FMLA and its regulations . In addition to providing eligible employees an entitlement to leave, FMLA requires that employers maintain employees’ health benefits during leave and restore employees to their same or an equivalent job after leave. The law also protects employees from interference and retaliation for exercising or attempting to exercise their FMLA rights.
4 While m ost cities in California follow the requirements set forth within the FMLA , the San Francisco Board of Supervisors passed the Paid Parental Leave Ordinance in 2016.
The ordinance requires employers in San Francisco to provide supplemental compensation to employees bonding with a child in addition to California PFL . The law applies to employers with 20 or more employees worldwide.
California Family Rights Act
CFRA is a California State law that provides eligible employees with up to 12 work weeks of unpaid, job- protected leave to care for their own serious health condition , a family member with a serious health condition, or to bond with a new child. In addition, the law requires covered employers to provide employees disabled by pregnancy, childbirth, or a related medical condition with unpaid, job- protected leave (Pregnancy Disability Leave) and/or accommodations.
To be eligible for CFRA leave, an employee must have more than 12 months of service with their employer, have worked at least 1,250 hours in the 12- month period before the date they want to begin their leave, and their employer must have five or more employees.
Eligible employees may take leave of up to 12 work weeks in a 12-month period, and the leave may be taken consecutively or intermittently under CFRA, many employees have the right to take job- protected leave, which is leave that will allow them to return to their job or a similar job after their leave ends.
Minimum Wage Task Forces
Although not a task force, the City of Los Angeles (LA) has a dedicated division within its Bureau of Contract Administration, the Office of Wage Standards (OWS), that administers and enforces its minimum wage laws and studies the potential impacts of raising the minimum wage in LA . The OWS is also responsible for managing and updating LA’s minimum wage ordinances and policies related to paid sick leave and fair hiring practices.
LA studied the potential impact of a citywide minimum wage increase when implementing "Raise LA", an initiative to increase the minimum wage and provide paid sick leave for workers in Los Angeles with a focus on hotel employees. Prior to the implementation of “Raise LA” the city commissioned multiple reports to assess the potential economic impacts with consulting firms including Blue Sky Consulting Group and Beacon Economics. The program was approved by voters in 2016 and has been implemented in phases since then.
Outside of California, the cities of Chicago and Seattle have developed task forces in the past to address minimum wage. Established in 2014, Chicago’s Minimum Wage Task Force included a diverse group of stakeholders from various sectors of the City’s economy, including labor, business, and government. In 2023, Chicago (estimated population 2.6 million) developed the ‘One Fair Wage’ ordinance based on a proposal to phase out the city’s subminimum wage for tipped workers over a five-year period.
Formed in 2014, Seattle’s Minimum Wage Task Force included representatives from business, labor, and non- profit sectors, as well as local government officials and community leaders. In 2015, the Seattle (estimated population 770,000) implemented a tiered minimum wage law based on the efforts of the task force. Seattle will be 5 reconvening the stakeholders to address minimum wage with the goal of ending tiered wages.
City of Burbank Considerations
Implementing a task force to review minimum wage within the City of Burbank would require extensive planning, research, resource allocation, and coordination among various departments and stakeholders. The task force would need to conduct in- depth research into the potential economic and social impacts of potentially increasing minimum wage or expanding the existing paid family leave regulations. Task force activities would include analyzing implementation strategies and estimating costs related to education and enforcement. Additionally, the composition of the task force would require careful thought and significant coordination to ensure broad, inclusive representation , to clearly outline the task force’s mission and goals, and to ensure a focused scope of work. This multi-faceted undertaking will require substantial allocation of resources to ensure success. A task force creation would need to be balanced with the Council’s existing goals and work program, which could present challenges in terms of time and resource allocation.
ENVIRONMENTAL REVIEW
This report has no potential for resulting in a direct or reasonably foreseeable indirect physical change to the environment and falls outside the definition of a “project” under the California Environmental Quality Act (CEQA) and is therefore not subject to CEQA review pursuant to § 15378 of Title 14 of the California Code of Regulations (CEQA Guidelines).
FISCAL IMPACT
There is no fiscal impact associated with consideration of this first -step report. Council may consider that education and enforcement of an ordinance on minimum wage would likely have significant fiscal impacts. Preliminary research on the cities of Pasadena and Santa Monica suggest that resource costs related to minimum wage enforcement range from $110,000 to $125,000 per year.
CONCLUSION
Like many neighboring cities, employers within Burbank are required to comply with State minimum wage laws. This includes annually adjusted pay rates of $16.00 per hour for all employers, $20.00 per hour for fast food employees, and a range of $18.00 to $23.00 per hour for certain health care facility employees.
Employers within Burbank are also subject to the State’s PFL policy, which applies to all employees within the state of California. Additionally , e mployers meeting the requirements of the State’s FMLA policy are also required to provide unpaid, job- protected leave for specified family and medical reasons.
Based on the existing applicable state laws regarding minimum wage and paid parental leave and the anticipated challenges of resource allocation required to manage a task force, Staff recommends that Council take no action to pursue a dedicated minimum wage task force at this time.
6 ATTACHMENT
Attachment 1 – April 13, 2021 Staff Report