Minimum wage increase in Los Angeles: Here’s the new rate and when it takes effect

The minimum wage in Los Angeles will undergo a new adjustment in 2025, affecting employees across various industries. This change is part of the annual update based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), published by the U.S. Bureau of Labor Statistics.

With this adjustment, the minimum wage will rise both within the city and in the unincorporated areas of Los Angeles County, reflecting an increase over the previous adjustment. The measure aims to ensure fair income for workers, considering the cost of living in one of the most expensive metropolitan areas in the country.

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When and how much will the minimum wage increase in Los Angeles?

Starting on July 1, 2025, the new minimum wage will go into effect in the city and county of Los Angeles. According to the latest update, the rates will be set as follows:

• City of Los Angeles: USD 17.87 per hour.
• Los Angeles County (unincorporated areas): USD 17.81 per hour.

This adjustment is based on Section 187.02(d) of the Los Angeles Municipal Code, which mandates that the increase must align with the CPI-W index. This index measures the change in prices of essential goods and services, ensuring that the minimum wage rises in proportion to inflation.

It’s worth noting that this increase is in addition to the state-wide wage hike in California, where the state minimum wage was set at USD 16.50 per hour starting January 1, 2025. However, some cities and sectors have higher rates, such as fast-food workers, who are earning a minimum wage of USD 20 per hour since April 2024.

Why does the minimum wage varies in different areas?

In the U.S., the federal minimum wage is USD 7.25 per hour, but each state can set a higher rate. In California, the cost of living is significantly higher than in other regions, prompting the implementation of a higher minimum wage.

In addition to the state rate, cities and counties have the authority to set even higher rates to ensure better economic conditions for workers. In Los Angeles, the local administration adjusts the minimum wage annually, taking into account inflation and the rising cost of living in the region.