With the minimum wage set to rise around the country in 2016, businesses need to start paying attention. In the New Year, the minimum wage will go up in Alaska, Arkansas, California, Connecticut, Hawaii, Massachusetts, Michigan, Nebraska, New York, Rhode Island, South Dakota, Vermont and West Virginia. Later in 2016, Minnesota; Maryland and Washington, D.C. will also see minimum-wage increases.
“Minimum wage rules are always a moving target,” James Paille wrote for CPA Practice Advisor, “and it’s important to watch for changes that affect your business and your clients’ companies.”
Businesses should especially be aware of complying with the law and possible broader implications within local economies. Compliance and monitoring time spent working are particularly important as wages rise. “The rules are strict, but the penalties are stricter,” Susan Prince wrote for HR.BLR.com. “Paying employees properly now will help you to avoid expensive fines, claims and lawsuits down the line.”
National attention on the minimum wage has also increased scrutiny when it comes to wage and hour laws, as well as overtime pay, according to a story on the Staffing Industry Analysts’ website. “Federal wage and hour lawsuits filed under the Fair Labor Standards Act reached a record high for the 12 months ending in September,” according to the story.
Employment law firm Seyfarth Shaw LLP expects more than 9,000 such cases will be filed next year. “The onslaught of wage and hour litigation continues at a record pace,” said Richard Alfred, chair of Seyfarth’s wage and hour litigation practice, in the Staffing Industry Analysts story. “New federal labor regulations, the fight for a minimum wage hikes and an intense focus on independent contractor classification and joint employer status create a perfect storm for new lawsuits.”
Businesses will especially want to track and evaluate time spent working, Prince wrote. “Employers may disregard insubstantial or insignificant periods of time beyond the scheduled working hours. But if employees are spending 10 to 15 minutes after work hours, employers will have to pay employees for this work time.”
It’s possible a rising minimum wage could affect overarching trends, like employment and profits. Mark J. Perry, in an article for the American Enterprise Institute, evaluated the Seattle restaurant job market as the minimum wage there begins a staggered increase to $15 per hour. He believes the restaurant jobs stagnated and even declined as a result of the first increase to $11 an hour in April 2015.
“Perhaps Seattle’s restaurant employment will recover, or perhaps it will continue to suffer from the upcoming full 58 percent increase in labor costs for the city’s restaurants that will be phased in during the coming years. … Time will tell,” Perry wrote. “What we know for sure is that there are now 900 Seattle area restaurant workers who were employed in January who are no longer employed today. … It looks like the Seattle minimum wage hike is getting off to a pretty bad start.”