Although minimum wage in Texas has not changed since 2009 (it is $7.25, which is the Federal Minimum Wage or FMW), companies with operations in multiple states should carefully watch minimum wage developments in order to remain in compliance. Many states and some localities (e.g., San Francisco) now have minimum wages above the FMW and many of them have more increases scheduled for the future. Of course, these changes to minimum wage rates also affect overtime pay calculations. Click here to see the National Conference of State Legislatures’ comprehensive state-by-state summary.
Recent changes to how minimum wage compliance is measured add to the issue’s complexity. A special heads-up goes to employers of hospitality employees who are given monetary tips. They need to be aware of possible changes to the permissible tip credit that affects the minimum wage. The calculation made to assure each employee is paid at least the appropriate minimum wage may also be affected by credits for such things as meals, lodging and reductions for employee-purchased uniforms and tools. Under the FLSA, compliance is generally determined by dividing an employee’s total compensation for a week by the total hours worked in the week. If the result is equal to or greater than the minimum wage, then the employer is in compliance with its obligations.
Here are a few suggestions for employers:
1. If you use a third-party payroll processor, just check to make sure they are aware of changes and that they have updated their systems appropriately.
2. Monitor minimum wage changes in states where you have employees. One idea is to assign one of your staff to check certain web sites once a week.
3. Make sure that non-exempt employees—tipped and non-tipped—are paid at least the minimum wage. If you have operations in states that have 7(i) exemptions, or have an exempt employee salary basis component that uses the state minimum wage, be careful to see that wage requirements are satisfied.
4. If your jurisdiction requires it, make sure that minimum wage is paid separately for each hour of work.
5. Tell the appropriate employees about their new wage, preferably in writing. Don’t just have it show up on their paychecks.
6. Train members of your HR and payroll staffs on how to respond to employees’ questions.
7. Update your minimum wage posters.
Achilles Group is here for you with our own HR expertise and that of knowledgeable partners we can refer to you. Call Deborah at 281-469-1800.
