One hotly-contested topic this election year has been the minimum wage increase. While we still don’t know exactly how federal minimum wage will be affected once our new president takes office; what we have right now is a mashup of states who are implementing gradual increases, several whose increases depend on a litany of caveats, and a few who are holding steady at or near their current local minimum wage.
If you’re paying employees in one of the 29 states that recently passed the minimum wage increase, you may be wondering—what does a local minimum wage increase look like?
If you’re anything like I was before I started at PayReel, the fact that there are both federal and local minimum wages is likely confusing. While some states (like Wyoming and Georgia) have minimum wages lower than the federal minimum wage, the federal minimum wage sets the benchmark.
Since July 2009, the federal minimum wage has been set at $7.25 per hour for non-exempt employees. This means that if your employees are working in the United States, and are eligible to receive overtime, you are going to be paying them a minimum of $7.25 per hour. But wait, there’s more! If your employee is working in a state that has a minimum wage set above the federal limit (there will be 29 such states, as well as Washington, D.C., on January 1, 2017), they must be paid that wage. For example, if your employee works in Washington, D.C., and lives in Virginia – you must pay them the minimum wage in Washington, D.C.
Paying non-exempt employees after federal and local minimum wage increases is only bound to get more confusing. Luckily, at PayReel we eat, sleep, and breathe compliance and have already updated our software to handle changing minimum wage rates.
If you want your business to stay compliant (read: avoid back taxes, keep your livelihood, and stay out of jail!), we always recommend reviewing your payroll practices around the first of the year. If you find yourself in over your head, get in touch with PayReel at 303-526-4900 or shoot us an email by clicking here.
We’re happy to help you hire who you want when you want while keeping your compliant and your workers paid.
About the author
PayReel Customer Experience Manager Natalie “The Go-Getter” McGinnis recapped 2016’s biggest news in freelancer management to help you prepare for 2017. Nat’s experience in recruitment and customer service set her up for success in providing laser-focused attention and assistance to the PayReel employees and clients who need it the most. Click here to read more of Nat’s Notes and meet the rest of the PayReel team by clicking here!
