The Palo Alto City Council unanimously approved an ordinance Monday to increase the city's minimum wage to $11, which will go into effect on Jan. 1, 2016.
The council also referred its policy and services committee to research the steps to reach a $15 minimum wage by 2018.
The city is one of many Santa Clara County cities that have established a minimum wage in recent years.
San Jose voters passed a minimum wage ordinance in 2012 that went into effect in March 2013. Mountain View and Sunnyvale adopted their own ordinances in October 2014. All three cities current have a minimum wage of $10.30.
Santa Clara last week passed an ordinance to set its hourly minimum wage rate at $11 by the start of next year.
The new rate in Palo Alto will help alleviate the costs for people working in the city, many who are commuters and supporting their families on a minimum wage, city spokeswoman Claudia Keith said.
Palo Alto's rate is a larger increase compared to the state minimum wage, which is scheduled to be $10 in 2016, and would be adjusted annually based on the consumer price index.
Mountain View and Sunnyvale are leading an effort for a regional minimum wage of $15 by 2018 and are scheduled to hold public hearings on the proposal next week.
The proposed regional minimum wage rate would increase every July 1 to $12 in 2016, $13.50 in 2017 and $15 in 2018.
Sunnyvale Mayor Jim Griffith and Mountain View Mayor John McAlister addressed a letter to Palo Alto Mayor Karen Holman on June 1 calling for her support of the proposed regional wage, which they said is "key to achieving uniformity across the region."
Palo Alto's goal is to reach a $15 minimum wage by 2018, but it has yet to state a position on the regional effort, Keith said.