The minimum wage is changing, are you ready?
Year-end is upon us, and that means that 2019 is ever closer. New year, new minimum wage.
The state of California, among numerous states, cities and counties, will raise their minimum wage rate in January.
A quick overview follows:
|Location||If you have 25 or fewer employees||If you have 26 or more employees|
|Los Angeles city (no change)||$12.00||$13.25|
|Los Angeles county (no change)||$12.00||$13.25|
|Malibu city (no change)||$12.00||$13.25|
|Pasadena (no change)||$12.00||$13.25|
|San Diego (no change)||$11.50||$11.50*|
|San Francisco (no change)||$15.00||$15.00|
|Santa Monica (no change)||$12.00||$13.25|
|New York state (eff 12/31/18)||$10.40||$11.10|
|New York city (eff 12/31/18)||$13.50
(10 or less employees)
(11 or more employees)
|Nassau, Suffolk, and Westchester Counties
|New Jersey state (eff 01/01/19)||$8.60||$8.85|
*rate superseded by state minimum wage
A hike in minimum wage doesn’t only impact companies with minimum wage employees. The new rate may impact what you pay your exempt level employees as well.
California employees who are exempt from overtime, are required to be paid no less than twice the weekly minimum wage amount. So, if the state minimum wage for your company is $12.00 per hour; you must pay exempt employees no less than $960 per week ($12 x 80 = $960).
How to Prepare for 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 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 includes current and future minimum wage requirements, as well as any new laws and regulations pertinent to your employees. 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.
- 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 2019 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 adjustments 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.