On July 1, unincorporated areas of Los Angeles County will experience a minimum wage increase to $12 an hour for businesses with 26 or more employees and to $10.50 an hour for businesses with 25 or fewer employees.
The increase represents a jump from $10.50 to $12 an hour for businesses with 26 or more employees and an increase from $10 to $10.50 an hour for businesses with 25 or fewer employees.
And that growth caused one local business to actually shed clients to reduce costs.
In the Santa Clarita Valley, the increase will only affect the unincorporated areas of Agua Dulce, Castaic and Stevenson Ranch.
The mandated increase, however, will not impact businesses located within the city limits.
“The city of Santa Clarita is currently not considering the minimum wage increase so we will be sticking to the state minimum wage requirements,” said Mayumi Miyasato, communications specialist for the city of Santa Clarita.
The county increase is expected to go up on July 1 each year in unincorporated areas of Los Angeles County until 2021, when the minimum wage reaches $15 an hour. In 2022, the county will annually adjust wages based on changes to the Consumer Price Index to keep up with cost of living.
In the Santa Clarita Valley, the increase will affect major employers like Six Flags Magic Mountain, which is the largest employer outside of city limits.
The increase will also affect companies like AMS Fulfillment, which is headquartered and operates a warehouse distribution center outside of city limits.
Ken Wiseman, CEO and managing partner of AMS Fulfillment, said the increase has altered the way the company hires employees, uses technology and operates outside of the state.
“We’ve certainly seen this coming so it’s not a surprise,” Wiseman said. “This is the biggest increase we’ve ever had in our company’s history; it’s an increase of about 14 percent.”
To offset the wage increase, AMS Fulfillment invested in technology to reduce staffing on some accounts. The company also had to remove some clients and slow its overall growth.
“We’ve had to go through our client base and get rid of a lot of our customers because of the increase in minimum wage,” Wiseman said. “We are about 100 employees less than we might have been… We still grew by 80 employees, but we slowed our growth as a company due to the fact that we knew we couldn’t handle these clients.”
The company also moved some business outside of California, where the market provides a more competitive cost environment.
With the wage increase, AMS Fulfillment is also focusing on investing in its current employees to increase their skillsets and hiring new employees with greater skill levels following a tougher screening process.
“We opened our learning center and are working with COC to provide a number of educational opportunities and our apprentice program,” Wiseman said. “We are looking for employees that are engaged in the success of the company and… are working toward maximizing the profitability of the company.”
Wiseman said the company still wants to do business here, but is now changing the way it operates in the state.
As for other companies, to help ease the changes the County of Los Angeles Department of Consumer and Business Affairs is encouraging businesses to contact the department’s Wage Enforcement Program for questions and assistance.
“Business owners should feel free to come to us for any questions or to find out about County resources that can help them during the wage increases,” DCBA Director Brian J. Stiger said in a statement.
To find out if workplaces are located within unincorporated areas covered by the Los Angeles County Minimum Wage, individuals can enter addresses on the county’s website at http://rrcc.lacounty.gov/OnlineDistrictmapApp/.
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