As the new year dawns, your company goals might parallel your personal goals. Better health is a given. It’s a good time professionally to review your current business plan to see where your company’s financial health may need care.
The changing of the calendar year also means the implementation of new laws that may impact the way you run your business. One of the top concerns for small and medium sized businesses is the evolution of the minimum wage. While the legal minimum wage has stayed largely unchanged over the last several years, it’s about to increase – in some cases, drastically.
Federal mandates haven’t yet changed but many states and cities across the nation have already raised their minimum wage requirements. Many states, such as California and New York, have implemented schedules that raise the rate in increments over the next few years, to achieve a $15 level. This could mean a much larger expenditure in payroll for your company, and one that you should prepare to successfully navigate.
The raise in minimum wage doesn’t only impact companies with minimum wage employees. In many cases, employees who earn above the required pay will need to see pay increases over time, as well. The issue has been hotly debated politically over the last few years. Like any political discussion, it might leave you believing that it’s an impossible dynamic. However, the reality is that your business can successfully thrive throughout these changes – if you prepare to meet them in advance. Below is an at-a-glance of the changes in California and New York. State by state details are available on this interactive map.
|Location||Effective Date||Minimum Wage|
*different minimum may apply to different cities
|1/1/2017||$10.50 per hr|
|Exempt employee minimum wage||1/1/2017||$43,680 per yr / $840 per wk.|
|Computer Professional minimum wage||1/1/2017||$88,231.36 per yr / $1,694 per wk|
|San Francisco||7/1/2016||$13.00 per hr|
|San Diego||1/1/2017||$11.50 per hr|
|New York State||1/1/2017||$9.70 per hr.|
|New York City (> 10 employees)||12/31/2016||$11.00 per hr|
|New York City (10 or less employees)||12/31/2016||$10.50 per hr|
|New York City (tipped wage)||12/31/2016|
|Nassau, Suffolk, and Westchester Counties||12/31/2016||$10.00 per hr|
How to Prepare for 2017 Minimum Wage Increases
Your company should take some steps to ensure that increasing the employee wages won’t damage the financial health of the company overall. For smaller companies, the extra requirements can be exceptionally taxing. Here are a few things to consider when planning for the immediate and long-term future:
Knowledge is Key. It’s important for you to stay up-to-date on changes in your area. This interactive map outlines state and local minimum wage rates. It’s a good idea to review new regulations with an HR professional, or counsel, to make sure that your practice and process meets state and federal standards.
Conduct an Internal Audit. It’s important that you know how these increased payroll expenses will impact the company ahead of time. An internal and thorough audit will give you a good indication of where your financial solvency is after the increase. It will also help you to map goals for growth into the future.
Employee Assessments. Your employees are your most valuable resources. The reality is that the new minimum wage may mean a decrease in hours for some employees or even a downsizing, depending on your specific circumstance. For the most successful road forward, it’s important to assess, and develop strategies to retain, your most valuable employees. Keeping good employees who are loyal and capable is essential to flourishing.
Streamlining Workflow. There are often areas of workflow that can be simplified to save person hours. This might include adding new technology, or changing set processes to improve production.
Meeting the New Minimum Wage Requirements in 2017 and Beyond
You’re not alone if you’re worried about how the wage increase will affect your business. Proper planning and good oversight will make the adjustment far smoother than you might fear. Keep in mind, yours isn’t the only business faced with these challenges. Other businesses in your area will be maneuvering through these requirements, as well