If you’re like most, you’re glad to see so many of the political commercials come to a close on election day, unless you live in Atlanta. With every commercial break, be it on radio and tv, you would continuously see several political messages. One political opponent slamming their counterpart or telling you what they would implement once they got elected. Now that your candidate either won or lost (congratulations or condolences, you choose), changes are on the horizon. Many topics are currently on the table, from taxes, free healthcare, free tuition, and more.
We have noticed that many of our clients are starting to ask us a number of questions regarding minimum wage and how it will affect them. In fact, we’ve had so many questions regarding the changes coming to the minimum wage that we decided to make this entire blog post about that very subject.
Here are some of the most popular questions that we get asked:
- Does the city, state, or federal government all have the power to control the minimum wage? Does one override the other?
- As a business owner, how do I get notified if the state or federal minimums are in place, and is there a grace period to implement them?
- If the minimum wage requirement for all my employees goes up and makes it so I can’t make payroll, and therefore, I have to let people go, can I be sued for wrongful termination?
Let’s answer these questions in order:
Does the city, state, or federal government have the power to control the minimum wage? Does one override the other?
We get this question a lot because Seattle imposed the highest minimum wage in the country. $12 per hour as of Jan 1, 2019, $13.50 per hour as of Jan 1, 2020, and $15.00 per hour as of Jan 1, 2021. So, in this case, the city of Seattle imposed this, not the state of Washington nor the federal government. Just in case you’re wondering what effect this has had, according to studies, “This policy reduced the number of weekly hours in by 6 – 7%.” In other words, the more the hourly wage has gone up, the number of hours employers have allotted for employees to work has dropped. So it can have unintended ramifications.
So, in short, Yes, a city can declare minimum wage mandates. A city or state somewhat falls under the state Mandate. According to Cornell University, “When an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.” So yes, states can impose a minimum wage, but so can the feds. Here is a useful resource that allows you to see the minimum wage set by each state: https://www.dol.gov/agencies/whd/minimum-wage/state
How do I, as a business owner, get notified if the state or federal minimums are in place, and is there a grace period to implement them?
This second question is more unclear in the answer, but the state or federal government has to give “enough time for affected business owners to be aware and implement the changes.” It does not specify what “enough time” means, nor does it determine if there is a grace period.
If the minimum wage requirement for all my employees goes up and makes it so I can’t make payroll, and therefore, I have to let people go, can I be sued for wrongful termination?
This last question is a tricky one. The answer can vary based upon the situation. There are too many scenarios to list. So the best solution is to reach out to us at VertiSource. We handle minimum wage and employment questions that keep you safe as an employer and manage all HR and payroll issues.
To learn more or contact us, visit VertiSourceHR.com or call 855-565-VSHR (8747).