Are the latest changes in federal wage and hour laws good for your business or only good for the government? In a session titled, “What’s New in Wage-Hour,” Matthew Simpson presented on the minimum wage and the impact of cities and states increasing the minimum wage. Simpson stated that raising the minimum wage in markets with a higher cost of living such as New York, NY and San Francisco, CA, is probably appropriate but that doesn’t mean that people in more rural areas need to receive the same $10.10 per hour.
Simpson suggests that the true motive of the federal government to raise the minimum wage is to increase taxable income. The higher the taxable income, the better for the government’s finances, but is it better for your business? Because of the variations in the cost of living state-to-state, minimum wage rates may be better established by local governments rather than the federal government.
Another way the federal government seeks to increase revenue is readdressing overtime exemptions, Simpson says. If exempt positions become non-exempt, those employees earn overtime pay and the government realizes an increase in revenue. The Department of Labor has grappled with this issue since last year, but no timeline has been published yet for implementation. If you’d like some additional information, we wrote about some of these proposed changes in our January newsletter.