West Hollywood’s new minimum wage law took effect in the new year, boosting pay for hourly employees at many businesses.

Starting on Jan. 1, minimum wage for West Hollywood hotel workers became $17.64 per hour — the highest minimum wage rate in the nation.

It surpasses minimum wage at Emeryville, another California city that previously held the nation’s highest rate at $17.13.

West Hollywood’s rate is also higher than California’s statewide minimum wage, which climbed to $15 per hour for employers with 26 or more employees in the new year.

It’s not just hotel workers seeing an increase. Minimum wage for employees at West Hollywood’s large business with 50 or more employees went up to $15.50. At smaller businesses, it became $15.

The ordinance, voted into law by the West Hollywood City Council in November, kick-starts a phased approach for minimum wage increases for large and small businesses.

On July 1, 2022, wages will go up again, with employees at large businesses getting $16.50 an hour, and at small businesses getting $16 an hour.

Next year, on Jan. 1 2023, employees at large businesses will make $17.50 an hour and those at small businesses will make $17.

Starting on July 1, 2023, the citywide minimum wage for all businesses will be $17.64. After that, the minimum wage for all businesses citywide will be increased every July, officials said.

Officials said what an employee earns in tips cannot count toward the minimum wage, and neither can their medical benefits.

“We passed this ordinance unanimously as a council because we believe that an economic recovery must include everyone,” West Hollywood City Councilmember Lindsey Horvath told KTLA. “We believe that good wages are an essential part of helping people recover from the economic impact of COVID-19.”

While many workers in West Hollywood praised the increase, the decision did receive backlash from business owners who said they were concerned that the new wage would harm businesses still struggling because of the pandemic.

When the West Hollywood City Council voted on the ordinance, Keith Kaplan, trustee of the Pandemic Recovery Coalition, told KTLA the timing wasn’t right for a wage hike since businesses are still working to recover financially.

“We’re not saying that we don’t agree with reaching the objective of livable workforce wages. It’s just not the time to do it, and to do it so big,” Kaplan said at the time. “The restaurants, the retailers, the hotels, they can’t survive it.”

The ordinance does provide a one-year waiver for businesses, if owners can “demonstrate that the ordinance would force the business to file bankruptcy or close, reduce its workforce by 20%, or reduce its employees’ hours by more than 30%.”

In outlining the wage hike, officials said most employees in West Hollywood are already earning at or above the proposed amount, and so increasing the minimum wage rate would help those being paid less than the majority of other workers in the city.

“We know that there will there will be challenges as always happens when something changes, but we will work with our business community and work with all members of our community to navigate those challenges,” Horvath said.

More details on West Hollywood’s minimum wage ordinance can be found here.