6 Challenges of Minimum Wage Rate Management

Image from Travel + Leisure

By Kelsey Basten

Published on September 13, 2018

Minimum wage rates have shifted from simple to complex in a matter of months. There are now many different factors employers must consider while tracking minimum wage rate data and maintaining compliance. Employers must:

1. Keep track of the latest city, county, state and federal rates.

Now more than ever, states, counties, and cities, who don’t see any movement at the federal level, are implementing minimum wage laws in their jurisdictions. This increase in minimum wage rate laws has also increased the amount of research and tracking that goes into maintaining compliance. Many payroll and compensation professionals are left wondering: “Is my data accurate?”, “Am I missing anything?” and “Which information applies to each of my locations?”

2. Sift through news alerts, blogs, agency websites, and legal aggregator databases.

Sifting through news alerts, blogs and agency websites takes a significant amount of time. You must determine the accuracy and credibility of the source, make sure the information is up-to-date and make sure you are not missing any postings or laws. Ordinances can slip through the cracks and there isn’t a sure way to tell you have collected all the information.

3. Perform continual data entry in spreadsheets.

With the number of rates that exist today, professionals must constantly perform data entry in multiple spreadsheets. Keeping track of multiple spreadsheets in a challenge, but when there are multiple people managing them, things can get messy. How do you keep track of who is updating what? And, when the sheet was last updated?

4. Determine which rate applies to each location.

One single company location could have up to four different minimum wage rates. The federal minimum wage remains at $7.25, but other jurisdictions are setting their rates significantly higher, with local laws sometimes even outdoing state law.

For example, in Minnesota, the federal minimum wage is $7.25, the state wage is $9.50, and the Minneapolis wage rate is $11.25, increasing gradually to $15.00 by 2022. How do you know which rate applies?

5. Consult with outside legal counsel or assign them to assist in tracking.

Enlisting the help of outside legal counsel could cost your company. Even if you have a perfect system set up in-house, you still may need to consult with outside stakeholders just to ensure you’re in compliance. How much are you willing to spend on this complicated task?

6. Distribute this information to other stakeholders/departments.

Minimum wage rate management impacts more than just the compensation department. Payroll, finance, compliance and legal need the information as well. How can you be sure all stakeholders received the guidance?

The solution?

GovDocs Minimum Wage provides up-to-date minimum wage information while reducing the risks of wage litigation, back wage payment and loss of brand integrity. To learn more about GovDocs Minimum Wage, contact your GovDocs representative or send us an email at info@govdocs.com.