How California’s Statewide Minimum Wage Hike is Affecting Your Temporary Workforce

It’s not news to the region’s employers that the minimum wage for California businesses with more than 26 employees increased statewide from $11/hour to $12/hour on January 1.

What’s more, Los Angeles County will be raising its minimum wage on July 1, from $13.25/hour to $14.25/hour.

What this means is that temporary workers taking assignments in Los Angeles County will be making more than $2 more an hour by mid-summer than if they were to take assignments in Orange County, where the minimum wage will remain $12/hour.

Brea staffing agency

We believe that employers in Orange County within a “reasonable” distance from Los Angeles County will lose out on top temporary workers unless they are willing to at least meet the higher minimum wages.

We’ve found that driving 60 minutes or more to make $2 or even “just” $1.25 more an hour is quite attractive to temporary workers. Long commutes are a way of life here in our region, and even taking a trip from the coast to the San Bernardino Mountains for a day is considered pretty much “nothing” to many of your friends and neighbors. (We know you agree with us, but in case you need proof…..)

Workers Making More than – But Near – Minimum Wage Also Expect a Hike

We’ve also seen that temporary workers who earned $2 or possibly as much as $3 more an hour than minimum wage before this year’s hike also expect to see an increase. If not, they will leave. So if an employer was paying a forklift driver $14/hour in December, that driver is expecting a raise to at least $15.

This expectation is particularly acute among lower-wage hourly workers (particularly those working in light industrial environments) on extended assignments (six-months or longer). Our administrative/professional associates, who already may have been making $18 or $20 or more an hour, haven’t been expecting a pay raise since the minimum wage hike.

We do, however, expect our administrative/professional associates to look for wage increases for their higher-than-minimum pay rates once the minimum wage reaches the $14 to $15 an hour area in the next year or so.

What This Means for Your Staffing Firm’s Billing Rates

We’ve found that our clients understand that a temporary agency’s employee cost doesn’t rise by $1/hour when the minimum wage increases by $1. We know they do because most of our client contacts work in human resources and understand well the costs involved in bringing on employees (as well as how using temporary staff can help keep an employers’ costs down considerably).

We also know they do because we’ve made a point of educating our clients months ago regarding how the past (and coming) wage hikes not only the temporary workforce’s pay expectations but also their staffing partners’ employee costs.

Bottom line on billing rates? Paying temporary workers $1/hour more does not mean you will be billed $1/hour more. Your bill rate will increase by an amount reasonable to cover our increased employee costs.

If you have any questions or concerns regarding how much to pay hourly for different skill sets and occupations, or if you’d like to start planning ahead for this summer’s wage increase so that your ability to continue to attract hard-to-come-by top talent, contact the branch manager at the Helpmates location nearest you.

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