How to Stay Up to Date with Minimum Wage Changes
While the federal minimum wage has held steady for nearly a decade, states and local entities continue to increase minimum wage rates. Learn how to maintain lawful wage and hour policies and practices.
Minimum wage requirements are constantly changing, leaving you vulnerable to costly and time-consuming lawsuits and investigations into wage practices. To make things worse, wage and hour claims have increased over the years due to better informed employees, aggressive attorneys, and ease of prosecution.
Even the slightest error can expose an organization (large or small) to a wage and hour lawsuits that can cost thousands (possibly even millions) of dollars to resolve.
It’s essential that employers maintain lawful wage and hour policies and practices. Keeping up to date with wage and hour changes is key to avoiding a potential claim.
Minimum Wage Laws
Minimum wage laws require employers to pay whichever minimum wage is the highest — federal, state, or local.
In addition to federal and state minimum wage laws, there are also citywide minimum wage laws, which can be as high as $15 (in Seattle, WA). Since you cannot go below the federal minimum wage, most employers must follow the state or local standard. The minimum wage is a strict obligation and cannot be waived by any agreement.
While it may seem obvious that employers must meet minimum wage requirements, there are many other considerations you may not be aware of. In addition to complying with state and local minimum wage requirements, you must also pay attention to all the details concerning off-the-clock work, overtime laws, deductions from pay, and more.
Common Wage and Hour Risks
- State and local minimum wage
- Off-the-clock work
- Deductions from pay
- Employee meal period and break/rest period laws
- State and local overtime laws
- Mistakes calculating the regular rate of pay
- Company policies prohibiting overtime work
- Wage statements
There are specific rules when it comes to minimum wage, payroll, wage statement, pay deductions, termination pay, expense reimbursement, and much more. Generally, there is little to no leniency regarding these wage and hours laws and regulations.
How to Protect Your Organization from Wage and Hour Claims
You must remain on your toes when it comes to wage and hour laws and regulations.
Here are some things you should do as an employer to maintain lawful wage and hour policies and practices:
Analyze Human Resources
It’s crucial to follow minimum wage laws, but it’s also important to analyze the wages of all employees and maintain consistency with your pay scale. You should determine the impact minimum wage increases will have on other employees and on your company’s bottom line.
Remember, it’s far more expensive to replace an employee than to retain a good one. For this reason, you should do what you can to hire and retain top talent. One way a Professional Employer Organization (PEO) can help is by offering competitive employee benefits and retirement services.
Additionally, a PEO can help you maintain accurate records, wage and hour compliance, regulatory reporting, federal and local tax compliance, and much more.
It’s important to integrate your record and timekeeping systems to properly calculate and prepare payrolls, tax reports, employee earnings statements, and management reports for your organization.
As a Certified PEO, Resourcing Edge takes care of the burden of payroll and tax management, with complete transparency to your employees. By integrating technology and computerized recordkeeping, you can save time, increase efficiency, and eliminate errors caused by manual entry.
Stay Up to Date
Use the Economic Policy Institute’s Minimum Wage Tracker to stay up to date with minimum wage requirements across the country.
Many states and localities have already passed legislation for incremental minimum wage increases of the next several years. It’s important to be proactive and start planning now for minimum wage changes in the future.
A Professional Employer Organization (PEO) can assist you in staying on top of all the rapidly changing laws and regulations that affect your business. Resourcing Edge employs a full-time, specialized staff to monitor and ensure compliance with all local, state, and federal employment laws and regulations.
U.S. Minimum Wage Changes
Changes in Federal Minimum Wage
The federal minimum wage has held steady at $7.25 since July 24, 2009.
Across the country, however, states and local entities (cities and counties) have enacted higher minimum wage laws and ordinances. Employers must pay whichever minimum wage is highest.
Changes in State Minimum Wage Rates
29 states, plus the District of Columbia, have a minimum wage that is higher than the federal minimum wage. Not all states change minimum wages at the start of the year. Some states and localities implement mid-year hikes.
For instance, several states changed their minimum wages starting July 1, 2018:
- Washington D.C. increased minimum wage from $12.50 to $13.25 per hour. D.C. has scheduled a $15 minimum wage, effective July 1, 2020.
- Maryland increased its minimum wage from $9.25 to $10.10 per hour.
- Oregon divides minimum rate requirements into three rates: Standard, Portland Metro, and Nonurban counties. Oregon increased Standard minimum wage to $10.75, Portland Metro to $12, and Nonurban counties to $10.50.
Changes in Local Minimum Wage Rates
In addition to federal and state minimum wage changes, many local (city and county) minimum wage changes also went into effect on July 1, 2018. There were 15 local minimum wage changes in California, two in Illinois, one in Maine, and one in Minnesota.
View a table of all July 1, 2018 State and Local Minimum Wage Increases.
Don’t let new-year and mid-year wage changes fly under the radar! As a Certified Professional Employer Organization (CPEO), Resourcing Edge monitors upcoming minimum wage increases and begins initiating strategic plans well beforehand.
Unfortunately, minimum wage changes are just one of the many challenges employers face when keeping up with today’s constantly changing regulatory environment.
In addition to monitoring and addressing minimum wage increases, we also provide Human Resources, Payroll and Tax Administration, Benefits Administration and Consulting, and a Robust Web-Based Management System to keep everything organized and immediately available.
Learn more about our error-proof payroll systems.
Interested in a no-obligation consultation on minimum wage laws, regulations, and legislation that could affect your business?Give us a call at (214) 771-4411 or contact us online!