Will Increased Minimum Wage Affect Your Home Business?
If you have employees and pay minimum wage, you’ll definitely find yourself paying more due to the new law, going into effect today, July 24. The Fair Minimum Wage Act of 2007 begins by increasing the current $5.15 to $5.85 per hour. Then the minimum wage will increase over increments until it reaches $7.25 hourly as of July 24, 2009.
Also, states vary regarding the increments. Some will increase the minimum wage faster than decreed by the Federal Government.
If you have employees at different wage levels and at least one is at minimum wage, how do you handle the increase? Do you give the minimum wage employee the required raise but leave the others where they are? Should all employees receive a raise because minimum wage ones do? It leaves the employer in a quandry.
Raising any wages will increase the business owner’s expenses. So how does the business owner compensate? Raising prices for products and services? However, there’s just so much of an increase some items will bear and consumers will stop purchasing.
This could affect the supplies you purchase for your business. Those businesses, if they hire minimum wage employees, may have to raise their prices to compensate and stay in business. For it isn’t only the raise in wage. It’s the related expenses that are based on wage, such as social security, unemployment tax, sometimes workmen’s compensation insurance, etc.
Another consideration…if minimum wage employees receive an automatic, mandatory increase in pay, should they attempt to become more productive to balance out the situation?
This is not to say whether or not employees should receive an automatic increase. It gives the home business owner some considerations about how this new law could affect him/her even if there are no employees.
What are your thoughts on the mandatory increase in minimum wage?Tags: employees, Fair+Minimum+Wage+Act+of+2007, home+based+business, home+biz, Home+biz+notes, Home+business, minimum+wage