While federal minimum wage remains at $7.25 an hour, the living wage in West Hollywood will be increasing to $11.42 for workers who receive health benefits, and $12.67 without benefits on August 17.

The new living wage ordinance (LWO) was approved on first read at a West Hollywood City Council meeting on June 20.

The West Hollywood LWO does not apply to every job in the city, it will not require every company that does business in the city, such as hotels, to pay the new livable wage.

“It doesn’t necessarily increase their wages, but it ensures we are only contracting with companies that do comply with the ordinance,” West Hollywood City Councilmember John Heilman said.

Previously, the living wage, which has been increased annually by about two percent, was $9.38 an hour with benefits, or $10.74 without benefits.

Heilman, who proposed the legislation, believes the increase will help protect workers in West Hollywood. But in many instances, companies that work within the city have typically paid higher wages than the ordinance dictates.

In determining the new living wage rate, the city council looked at multiple factors including the cost of housing, groceries and health care. After comparing rates with neighboring cities, the council decided to make the increase.

The cities of Los Angeles, Santa Monica and Pasadena enforce a LWO, but Beverly Hills and Culver city do not.

On July 1, L.A.’s rate will increase to $10.42 with health benefits, and $11.67 without benefits.

“A lot of municipalities don’t view that as their role,” Heilman said. “But directly, or indirectly, it becomes a burden on the city in other ways.”

In order to maintain compliance with the law, businesses are required as part of contracts with the city to abide by the LWO and maintain records that will enable the city to ensure compliance. At any point during the term of the contract, the city can request the documents and perform an audit.

The city of West Hollywood conducted an audit on a parking vendor after receiving a complaint from a former employee that the company was not in compliance with the LWO. After an investigation, the city determined the company was in compliance.

While enforcement of the LWO has generally operated on a complaint-driven basis, Heilman has faith that companies the city has done business with are all compliant.

But, if a company was found in violation the city would likely initiate provisions to terminate the contract.

Previously, the LWO was applied on a case-by-case basis if the city felt that there was no need for a company to follow the law, or if the city feared losing the contract. The new law requires LWO compliance on all contracts.