Proposed Changes to Local Minimum Wage

On September 25, 2017 the City Council provided direction to staff to begin the process of establishing a local minimum wage in Redwood City.

Currently, the Federal minimum wage is $7.25 an hour, while the State minimum wage is $10.50 an hour for businesses with less than 26 employees and $11.00 an hour for those with 26 or more employees. The State of California passed a measure in April 2016, which will increase the minimum wage each year until it reaches $15.00 an hour by 2022. After that time, it will increase each year based on the Consumer Price Index increase but no more than 3.5% per year.

Due to the high cost of living in the Bay Area, 17 local cities have established a local minimum wage that is higher than that required by the State of California. Most of these cities will achieve the $15.00 an hour rate by January 2019. In San Mateo County, the cities of San Mateo and Belmont have established a local minimum wage as well as some cities in Santa Clara County including San Jose, Mountain View, and Palo Alto.

Should Redwood City establish a local minimum wage, the new rate would apply to all businesses that are established within Redwood City and to those businesses whose employees provide a service within Redwood City at least two hours a week. No exceptions are proposed to exempt any businesses or employees from this provision. The proposed rate is $15.00 an hour beginning January 2019, however, other alternatives may be considered based on feedback from Redwood City businesses and the community.

As part of the process of establishing the local minimum wage, extensive outreach was done to gain feedback from both the community and Redwood City businesses. A notice was mailed to more than 6,000 businesses that are located within Redwood City asking for their input on a survey regarding their current salaries and how a change in the local minimum wage may impact their business. In addition, City staff and City Council members met with several key business stakeholder groups and visited over 200 businesses for one-on-one visits. Overwhelmingly, the support from the business community for establishing a local minimum wage in Redwood City has been very positive. Many businesses are currently paying close to or more than $15.00 an hour and see this wage as necessary to attract the employees that are needed.

In addition to these outreach efforts to local businesses, City staff and the City Council also heard from the community. A community meeting was held on January 24. The meeting was well attended and City staff provided details about the proposed wage increase and heard from community members about concerns and answered questions. General sentiment was that the minimum wage increase cannot happen soon enough: due to the high cost of living, even with a $15.00 per hour minimum wage it will still be difficult for low wage workers to live in Redwood City and surrounding areas. Attendees also asked for whistle-blower protections, stiff penalties for enforcement, and proactive communications from the City notifying businesses of the new minimum wage.

The City Council is scheduled to hear this item at the March 26, 2018 City Council meeting.

For more information about these efforts to establish a local minimum wage or to submit comments via email, go here.