Did you know that the minimum wage has been around since 1938? The first minimum wage was just 25 cents per hour! In today’s dollars, that would be about $4.19 per hour. Over the years, the minimum wage has increased to keep up with inflation and economic changes. Business owners need to understand how the minimum wage affects their organization. In this blog post, we will discuss the history of minimum wages and what you can do to manage it in your business.
The historical evolution of minimum wage:
In 1938, during the Great Depression, Congress passed the Fair Labor Standards Act (FLSA), which established the first federal minimum wage at $0.25 per hour and prohibited child labor. The FLSA also created the 40-hour work week and time-and-a-half pay for overtime. Since then, Congress has increased the federal minimum wage 11 times. The most recent increase was in 2009, from $0.65 to $0.75 per hour. In 2016, it rose again to its current $0.85 per hour.
What does minimum wage mean for different businesses?
The minimum wage can have different effects on different businesses. Small businesses may find it difficult to absorb the increased costs associated with a higher minimum wage. They may need to raise prices or reduce staff to stay profitable. Large businesses, on the other hand, may absorb the higher minimum wages cost better. Sometimes, they may find that a higher minimum wage leads to increased productivity and lower turnover rates.
What can you do as an employer?
If you are an employer, there are several things you can do to manage the impact of the minimum wage on your business:
– Review your budget and make adjustments accordingly:
If you are a small business owner, it is important to review your budget and ensure you are prepared for the increased costs associated with the minimum wage.
– Communicate with your employees:
Be sure to communicate with them about any changes to their pay or hours. This will help them understand how the minimum wage will affect them and their families.
– Train your managers:
Make sure your managers are trained on how to effectively manage a workforce being paid at or near the minimum wage. This includes understanding the law and best practices for motivating and retaining employees.
What can you do as an employee to ensure that your organization complies with the minimum wage laws?
Honestly, not very much. As an employee, you can voice your concern to your employer if you feel they are not in compliance with the minimum wage laws. Other than that, it is up to the employer to ensure they follow the law. You can also contact your local labor board or the US Department of Labor if you have any concerns.
What does the law say about minimum wage, and more importantly, what happens if you do not follow the law:
The Fair Labor Standards Act (FLSA) sets the federal minimum wages and overtime pay rules. Most states also have their minimum wage laws, and some set a higher minimum wages than the federal level. Employers must comply with both the federal and state laws that apply to them.
If an employer violates the FLSA or any other federal or state law, they may be subject to penalties, including back wages, fines, and even jail time. In addition, employees who are not paid properly may file a lawsuit against their employer.
Federal and state minimum wage laws:
The federal minimum wages is the minimum hourly pay employers can legally pay their employees. The current federal minimum wage is $0.85 per hour. However, some states have enacted minimum wages laws higher than the federal level. As of 2016, 29 states and the District of Columbia have a state minimum wages higher than the federal level. So the question is, which takes precedence?
The federal minimum wage supersedes state minimum wages laws in a court of law. However, if an employee is covered by federal and state minimum wage laws, the employer must pay the higher of the two rates.
The minimum wage is a complex issue with different effects on different businesses. As an employer, it is important to review your budget and ensure you are prepared for the increased costs associated with the minimum wages. You should also communicate with your employees about changes to their pay or hours.
If you are an employee, you can voice your concern to your employer if you feel they are not in compliance with the minimum wages laws. However, ultimately it is up to the employer to follow the law.
If an employer violates the law, they may be penalized, including back wages, fines, and even jail time. Employees who are not paid properly may also file a lawsuit against their employer. Federal and state minimum wage laws are complex, and you must be aware of the laws that apply to you.