Complying With Local Minimum Wage Ordinances in California: Practical Guidance for Remote Workforces

Quick Hits

• Local minimum wage ordinances in California are applicable to the hours worked in a locality and enforceable by multiple mechanisms, with monetary penalties and other relief available where violations have occurred.
• Claims tied to local minimum wage shortfalls often include derivative claims—waiting-time penalties, wage statement violations, unpaid overtime, unfair competition, and Private Attorneys General Act (PAGA) civil penalties—magnifying exposure.
• Noncompliance with a local ordinance can expand into multi-year, multi-theory wage litigation and culminate in class-wide relief.

The Legal Framework: Pay Rates Based on Where Employees Work

California’s wage and hour regime requires payment of at least the applicable minimum wage “for all hours worked.” State law both permits and enforces local minimum wage ordinances that exceed the state rate. Courts have upheld such ordinances and confirmed they are not preempted by federal law. Employers must therefore apply the most protective wage rule in effect for the employee’s actual work location.

This location-based principle applies with particular force to remote and hybrid arrangements. If a nonexempt employee performs work within a city or county that has adopted a higher local minimum wage, the employer must pay at least that local rate for the hours worked there. The relevant jurisdiction is the place of performance, not the employer’s corporate domicile or payroll processing location.

Local rates vary materially and are subject to frequent change. For example, the 2025 minimum wage rates included $19.18 per hour in San Francisco, $19.90 per hour in Emeryville, $19.20 per hour in Mountain View, and $19.65 per hour in West Hollywood, among others, with some jurisdictions adopting tiered structures or special treatment for small employers. Employers paying only the state minimum wage—$16.50 per hour in 2025 and $16.90, effective January 1, 2026—might underpay in those localities unless they adjust to the higher local thresholds.

Managing Remote Workforces: Considerations for Employers

Employers may want to integrate local minimum wage compliance into the design of their remote-work programs, payroll operations, and recordkeeping. The following are options that employers may wish to consider:

• Implementing focused location tracking. This means requiring remote employees to designate and update their primary work location(s) and disclose any temporary relocations, integrating geolocation data or attestations into HRIS and timekeeping systems, and, where employees split time across jurisdictions, paying the applicable local rate for the hours worked in each location.
• Building a verified wage–rate registry. Consider maintaining an up-to-date matrix of state and local minimum wage rates (including small-employer tiers, if applicable), effective dates, and posting requirements, automating alerts for scheduled increases and emergency adjustments, and building hard-coded rate changes into payroll calendars.
• Auditing and remediating. Consider conducting periodic internal audits to compare paid rates to local requirements for all remote employees. Where underpayments are identified, to mitigate risk, consider promptly correcting prospectively and paying make-whole amounts, including liquidated damages for minimum wage violations.
• Aligning policies, training, and postings. Updating handbooks, remote-work policies, and manager guidance to reflect location-based wage obligations, while providing employees with applicable local wage postings or digital equivalents, as required, can be effective.
• Coordinating with vendors and affiliates. If staffing agencies, contractors, or affiliates supply labor, it is sensible to ensure that pay practices and contractual obligations align with local minimum wage requirements for work performed, as joint and derivative liability can arise from any failures.

Key Takeaways

The combination of varied local rates, protective state standards, and potent private enforcement tools has raised the stakes for employers in California. By anchoring pay practices to the location of work, maintaining robust records, and operationalizing local ordinance compliance, employers can begin to take steps to reduce their wage-and-hour exposure in the state.

Ogletree Deakins’ California Class Action and PAGA Practice Group and Wage and Hour Practice Group will continue to monitor developments and will provide updates on the California, Class Action, and Wage and Hour blogs as additional information becomes available.

Further information on the minimum wage rates and requirements of California localities can be found in the Ogletree Deakins Client Portal, specifically in the California minimum wage law summaries. (Full law summaries are available for Premium-level subscribers; Snapshots and Updates are available for all registered client-users.) For more information about the Client Portal or to inquire about a Client Portal subscription, please contact clientportal@ogletree.com.

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