2020 Future Fiscal Impacts - Minimum Wage


SAMLARC’s professional service providers are crucial to maintaining an attractive and safe community. The functions fulfilled by these companies include: landscape, pools, Lake and Lagoon maintenance; athletic fields, parks, and facility maintenance; janitorial and security services; and utility (gas, water, electricity) provision. Many of these service providers employ a labor force of hourly workers.


SAMLARC’s professional service providers are crucial to maintaining an attractive and safe community. The functions fulfilled by these providers range from landscape and pool maintenance, to athletic fields, parks, and facilities services, janitorial and security services, and more. California’s minimum wage schedule affects all industries, from retail to food service to your homeowners association.


SAMLARC’s professional service providers are crucial to maintaining an attractive and safe community. The functions fulfilled by these companies include: landscape, pools, Lake and Lagoon maintenance; athletic fields, parks, and facility maintenance; janitorial and security services; and utility (gas, water, electricity) provision. Many of these service providers employ a labor force of hourly workers.


In 2016, the state of California implemented a law to raise California’s minimum wage. Historically, State wages have risen from 1% to 3% annually. However, the recent wage increases mark a 50% increase over the span of six years – an unprecedented increase. The new Wage Schedule will bring wages up from $10 per hour in 2016 to $15 per hour in 2022. Roughly one-third of California employees are compensated at minimum wage, and the increases are affecting all industries, from retail to food service to your homeowners association.


This state mandated law directly affects businesses’ ability to compensate their employees. First, the increase creates pay compression: the tension caused when employees are compensated at different rates due to external forces, regardless of skill or tenure. Not only is the employer required to increase their minimum wage workers’ pay, but the compensation of tenured employees may also need to be readjusted to create a more equitable pay scale. Readjusting the pay scale may affects the company’s operating budget, which in turn necessitates an increase in contract pricing