LAX Living Wage Ordinance: Rates, Health Contributions, and Exemptions

The LAX Living Wage Ordinance requires businesses operating at Los Angeles International Airport to pay covered workers $19.87 per hour if the employer provides qualifying health benefits, or $25.96 per hour if it does not, as of July 1, 2025.¹ The ordinance, codified at Los Angeles Administrative Code Section 10.37, also mandates paid and unpaid time off, protects workers from retaliation, and lets courts triple back-pay awards when a violation is willful.

Current Wage Rates

Two tiers apply to every hour a covered employee works furnishing services related to the airport.² Effective July 1, 2025:

With qualifying health benefits: $19.87 per hour in cash wages, plus at least $6.09 per hour toward health insurance premiums.
Without health benefits: $25.96 per hour in cash wages.

Both figures are adjusted annually, typically each July 1, based on changes in the Consumer Price Index.¹ Employers that miss an annual adjustment owe back pay from the date the new rate took effect.

Who Has to Pay It

The ordinance applies to contractors, subcontractors, lessees, and licensees operating on airport property under agreements with the City of Los Angeles. That sweep covers airline catering, terminal maintenance, ground handling, security screening, baggage handling, janitorial services, and similar airport support work.¹ If a business holds a service contract, lease, or license permitting commercial activity at LAX, the ordinance almost certainly applies.

On the worker side, coverage reaches any non-managerial, non-supervisory, and non-confidential employee who spends time working for one of these employers.³ The definition is deliberately broad. Prime contractors are also responsible for making sure their subcontractors comply with wage-rate adjustments and pass raises through to affected workers.

The Health Benefit Contribution

An employer that wants to pay the lower cash-wage tier must contribute at least $6.09 per hour toward a qualifying health plan for each covered employee.¹ That contribution rate is itself adjusted each July 1, tied to the Consumer Price Index for Medical Care Services.⁴

The plan must offer genuine, comprehensive coverage. A bare-bones plan, or one with premiums so steep that workers cannot actually use it, will not qualify. And there is no splitting the difference. If an employer contributes $5.50 per hour instead of $6.09, the full without-benefits wage rate of $25.96 kicks in for the entire workforce, not just the shortfall.

Paid and Unpaid Time Off

Full-time covered employees earn at least 96 hours of compensated time off each year, usable for sick days, vacation, or personal needs.⁵ The leave accrues from the start of employment and is paid at the worker’s regular living wage rate.

Employers must also provide 80 hours of uncompensated time off annually for situations like a family member’s illness or a personal emergency.⁵ Retaliation for using either type of leave is prohibited.

Under California law, accrued compensated time off counts as earned wages. When a covered employee leaves for any reason, the employer must pay out all unused accrued time in the final paycheck at the worker’s final rate of pay.⁶ Missing that payout creates a separate wage claim on top of any living wage violation.

Exemptions

Not every airport business owes the living wage, but each exemption requires a formal application through the Bureau of Contract Administration.

A collective bargaining agreement can expressly supersede the ordinance if all parties specifically waive the living wage benefits, in whole or in part, for the term of the CBA.
A qualifying 501(c)(3) nonprofit may apply, but only if the CEO’s hourly compensation is less than eight times the hourly wage of the organization’s lowest-paid worker.
Public lessees and licensees with no more than seven total employees, on and off City property, may qualify as small businesses.
High school and college students in work-study or employment programs lasting less than three months are exempt.
LAWA concessionaires with fewer than 50 employees can apply for a hardship waiver.

Application forms and instructions are posted on the Bureau of Contract Administration’s website.⁷ Employer name, contract number, and exemption category should match business records exactly to avoid delays or denials.

Worker Retention When a Contract Changes Hands

A companion measure, the Service Contractor Worker Retention Ordinance, protects workers when an airport service contract moves from one company to another. The successor contractor must offer employment to eligible workers from the outgoing company and keep them on for at least 90 days.¹ During that window, the successor cannot fire a retained worker without cause and must complete a written performance evaluation at the end of the period.

A worker qualifies for retention rights by meeting all four criteria:

Earning less than twice the hourly without-benefits living wage rate.
Working primarily in the City on or under the City agreement.
Having been employed by the outgoing contractor or its subcontractors for at least 12 months.
Not being a managerial, supervisory, or confidential employee.

If the incoming contractor needs fewer workers than the prior company employed, seniority within each job classification decides who gets retained. Workers not initially hired go on a preferential hiring list, and the successor must draw from that list before hiring externally.⁸

What Happens If an Employer Violates the Rules

A worker who believes an employer is out of compliance must first send written notice identifying the specific violations and the facts behind them. If the employer does not fix the problem within 30 days, the worker may file a civil lawsuit in California Superior Court.⁹

A prevailing worker can recover:

Back pay for every day the violation occurred.
The difference between the without-benefits wage rate and the with-benefits rate, minus whatever the employer actually contributed toward health coverage.
Reinstatement, back pay, or other relief the court considers appropriate for retaliation.
Treble damages, meaning all of the above tripled, if the court finds the violation was willful.
Attorney’s fees and costs.

The treble-damages provision is where the exposure gets serious. Even a small hourly shortfall, multiplied across dozens of workers and months of noncompliance, can turn into a six-figure judgment once tripled.⁹

Beyond the courthouse, the City can declare a material breach of the employer’s contract, lease, or license. That can lead to termination of the agreement, the return of money the City already paid for services not yet performed, and forfeiture of retained funds. For a business whose operation depends on its airport agreement, losing the contract is the harshest consequence on the table.

Retaliation Is Separately Prohibited

Employers cannot fire, cut pay, or otherwise punish a worker who complains to the City about living wage compliance, participates in an enforcement proceeding, or tries to assert rights under the ordinance.¹⁰ Retaliation claims move through the same civil enforcement process, and willful retaliation carries the same treble-damages multiplier.

Recordkeeping and Filing a Complaint

Employers must keep detailed records for every covered worker, including full name, hourly wage rate, and total hours worked each pay period. Documentation of health insurance contributions, such as premium invoices and enrollment records, must also stay on file. These records are the primary evidence during City audits, and gaps tend to be read against the employer.

Workers who believe they have been underpaid can file complaints with the City of Los Angeles Office of Wage Standards. The office does not ask about a worker’s immigration status or require related documentation when processing complaints.

1
Los Angeles World Airports. Living Wage and Service Worker Retention Ordinances
2
Los Angeles Administrative Code. Los Angeles Administrative Code Section 10.37.2 – Payment of Minimum Compensation to Employees
3
Los Angeles Administrative Code. Los Angeles Administrative Code Section 10.37.1 – Definitions
4
City of Los Angeles Bureau of Contract Administration. Rules and Regulations Implementing the Living Wage Ordinance
5
Bureau of Contract Administration. Living Wages Ordinance
6
California Department of Industrial Relations. Vacation FAQ
7
Bureau of Contract Administration. LWO Printable Forms and Posters
8
City of Los Angeles Bureau of Contract Administration. Service Contractor Worker Retention Ordinance Q and A
9
Los Angeles Administrative Code. Los Angeles Administrative Code Section 10.37.6 – Enforcement
10
Los Angeles Administrative Code. Los Angeles Administrative Code Section 10.37.5 – Retaliation Prohibited