Tag Archives: minimum wage

Massachusetts Minimum Wage

Massachusetts Minimum Wage to Rise – How Will This Affect Your Business?

It was recently announced that Massachusetts Governor Deval Patrick signed a law to steadily raise minimum wage over the next three years. The purpose is to make it so low-income workers can earn a better wage and reduce poverty levels throughout the state. After implementation, the minimum wage will be considerably higher than the proposed federal minimum wage of $10.10. Here are the details and what it means for your business.

Change in Massachusetts Minimum Wage

Although Massachusetts currently provides workers with a minimum wage of $8, which is higher than the federal minimum wage of only $7.25, it will gradually increase over time until it finally reaches $11 in 2017. According to the Boston Herald, “the first increase in the minimum wage, to $9 per hour, will take effect on Jan. 1. The hourly wage will bump up to $10 on Jan. 1, 2016 and to $11 on Jan. 1, 2017, which would be above any increase currently planned in other states.”

This change will also impact employees who earn tips, and instead of getting $2.63 an hour, they will receive $3.75 an hour by 2017. It’s projected that the new law will affect roughly 600,000 minimum wage workers and 200,000 tipped workers.

How this Affects Employers

This minimum wage spike obviously means that employers will be spending more to compensate employees. Whether this is a good thing or bad thing depends upon how you look at it. On one hand, it can decrease your employee turnover rate, which means you can achieve more stability and reduce your overall training costs. This can lead to better team chemistry when your business’s positions aren’t like revolving doors.

This can help you get the most from your employee resources, which can translate into increased productivity. An added benefit is that stronger team cohesion often results in higher quality products and services. That should have a positive impact on customer satisfaction where you’re more likely to have repeat sales and customer acquisition can happen more organically.

Another interesting point that proponents make is that a higher minimum wage could act as an economic stimulus. The logic is that when employees earn higher salaries, they are able to spend more. This ultimately means that small to mid-sized businesses could increase profits and strengthen the U.S. economy as a whole.

On the other hand, the increased minimum wage could make it so you’re not able to hire as many people, and you may be forced to let some workers go. You may also have to pay more for unskilled labor, such as high school workers. This could put a strain on operations and thwart the progress you’ve made at least for the short term.

The Big Picture

Whether this minimum wage increase is positive or negative really depends upon your viewpoint and your business’s specific circumstances. Regardless of your stance, it’s important to brace yourself for this change and figure out how your business will adapt. That way you can ease the transition and ensure that you remain compliant with state laws.






summer youth employment

What Business Owners Need to Know About Summer Youth Employment

Summer is a time when many young people look for seasonal jobs while they’re out of school. With so many minors flooding the workplace, it’s important for business owners to be familiar with the legalities affecting summer youth employment. Here are three main areas that you should be aware of when hiring anyone under the age of 18 for the summer.


Fair Labor Standards Act

The FLSA was created in 1938 to regulate the hours that employees work, ensure adequate pay and prevent children from working in dangerous environments. Minors between the ages of 14 and 15 are not allowed to work any more than 40 hours when school is not in session and not in an environment that could jeopardize their health. Workers aged 16 or 17 are allowed to work unlimited hours during this time as long as it’s not under hazardous conditions.

In terms of occupations that are considered hazardous, this fact sheet from the U.S. Department of Labor provides all the information you should need. Some examples of dangerous industries include working in mining, construction and public utilities. There are also a lot of regulations for the restaurant industry because of contact with food processors, sharp knives, meat coolers, etc.

If you’re in an industry with dangerous job duties, there will probably be considerable limitations on the tasks that minors can perform. When this is the case, you will want to fully familiarize yourself with which duties are acceptable and which are not. Otherwise, if there are little to no dangers, this shouldn’t affect what you can ask of your youth employees.


Minimum Wage for Tipped Employees

You are required to pay tipped employees $2.13 an hour in direct wages as long as this combined with the money earned from tips equals at least the federal minimum wage of $7.25. The exception is when this combination doesn’t reach at least $7.25. In this case, you are responsible for making up the difference, which would be a maximum of $5.12. There are some subtle differences between states, and the wage and hour division tables will show you the specifics based on your state’s laws.


FLSA Overtime

If youth employees work an excess of 40 hours in a week, they must be paid at least one and one-half times their regular pay. This is based on a regular seven day workweek of 24 hours per day for a total of 168 hours.  However, it doesn’t have to coincide with a calendar week and can begin and end whenever you choose. You can also create different workweeks for individual employees or groups of employees.

Summer youth employment is something that can benefit both your business and younger workers. It’s just important to ensure that you comply with the FLSA and adhere to all relevant legalities. According to the U.S. Department of Labor, “violators of the youth employment provisions may be subject to a civil money penalty of up to $11,000 for each minor employed in violation.” By maintaining a safe workplace, you can keep operations running smoothly and give your business a positive reputation.

Photo Source: flickr

FLSA in 2014: How is it Affecting Your Business?

Protecting the rights of workers and keeping your business compliant with employment laws is a serious matter, and is why the FLSA was created in 1938. Under the Fair Labor Standards Act, employees are provided with a fair wage, reasonable hours and safe working conditions. Failing to adhere to regulations and employment laws can lead to criminal violations and other problems that can disrupt operations.


What You Need to Know about the Fair Labor Standards Act

According to the United States Department of Labor, “the FLSA establishes minimum wage, overtime pay, record keeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.” The current minimum wage as of mid-2014 is $7.25 per hour. Nonexempt workers must receive overtime pay for any hours exceeding 40 in a workweek.

Minors must not work excessive hours to the point that it conflicts with their education or be placed in situations/environments that could be hazardous to their health. It’s your responsibility to keep track of the time that employees work and the amount of money that they earn. You must also place an official FLSA poster in your workplace so it can be viewed at any time. This link allows you to print off a PDF version of the poster.


How Can Affect You as an Employer?

If you employ minors under the age of 16, there are definite limitations on how much time they work. For instance, they can’t work any longer than three hours on a school day or eight hours on a non-school day. They can’t work longer than 18 hours in a school week or 40 hours in a non-school week. Anyone under the age of 18 cannot be exposed to dangerous conditions and there may be limitations on the duties they can perform. For example, a minor may not be able to operate an oven or handle knives in a restaurant.

In terms of payment, workers must be given minimum wage. The exception is for tip-based workers like waiters and bar tenders. However, if the total sum of an employee’s earnings don’t equal minimum wage, then you are required to make up the difference. In some cases, you can receive a credit for tipped employees as long as there is a guaranteed minimum for their work.

If you have employees that commonly work more than 40 hours per week, the Fair Labor Standards Act requires you to pay them at least one and one-half times their regular pay. Consequently, you may need to hire more workers and divide hours more equally if meeting this compensation requirement is an issue.

Understanding how the FLSA works is important for keeping your business on the right side of the law. It also helps to create a positive work environment and ensures that the basic rights of your employees are met. The end result should be happy and healthy workers, which can improve the overall reputation of your company.




Photo Source: Wikimedia Commons