Did you miss our webinar, Minimum Wage: 5 Trends Affecting Your Labor Law Compliance Program? Don’t worry, we have compiled all the most important information right here:
Minimum wage has evolved significantly since it was first established
The first federal minimum wage was established in 1938 at $0.25 an hour to prevent unethical employer practices where the wage was disproportionately low compared to the work, such as sweatshops.
Today’s federal minimum wage is $7.25 and has increased 22 times since 1938. The Economic Policy Institute states that today the minimum wage is in place to overcome poverty, promote equality between men and women, and assure equal pay for equal work.
This leads us to ask, what are the trends we see today?
Trend 1: The Changing Minimum Wage Worker
When we think of minimum wage workers, we may envision teenagers or young adults working part-time and living at home with their parents. However, minimum wage work is also a significant source of income for people who support both themselves and their families.
According a 2015 U.S. Bureau of Labor Statistics study, today’s minimum wage worker looks like this:
- Nearly 50% are under 25 years old
- 8% are women
- 76% are white
- 23% haven’t earned a high school diploma
- 65% work part-time (less than 35 hours per week)
- 47% live in southern states
- 65% are service workers; 50% of which work in food prep and serving-related industries
Trend 2: Increase in County and City Minimum Wage Laws
To date, 32 U.S. cities and six counties have minimum wage laws.
We are seeing this increase for a few reasons. First, wages are changing to account for living factors specific to the city or county. Second, local jurisdictions can pass and update laws at a faster pace than at the federal level. Passing laws at these higher levels takes more time because of the variety of demographics, differences in politics and other factors.
Trend 3: Increase in State Preemption Laws
Preemption at the state level is also a trend because some states are concerned that multiple minimum wage requirements – federal, state, county, city – create confusion for employers. Plus, with higher minimum wages in certain areas, some states are wary employers may take a financial hit and decide to close or move locations to lower minimum wage areas.
Trend 4: The Move to a $15 Minimum Wage
The move to a $15 minimum wage started in 2012 in New York City and has grown to nearly 300 cities worldwide. In the U.S., this action has raised wages for 22 million workers, 10 million of which are on their way to earning a $15 rate.
- $15 an hour for a full-time (40 hours a week) worker is about $30,000 a year, which is less than the U.S. poverty threshold of $34,000 a year
- Increase in discussions about how the average minimum wage worker has changed over time and the minimum wage should adjust accordingly
Today, there are many jurisdictions moving toward a $15 minimum wage, including but not limited to:
- New York (by 2021)
- California (by 2022)
- Seattle (now)
- New York City and Sunnyvale, CA (by 2018)
- Minneapolis, MN (in discussion)
Trend 5: Minimum Wage Rate Management is More Complex Than Ever Before
Given these trends, we at GovDocs know the process of tracking and managing minimum wage rates – and their changes – is challenging. You may have to:
- Monitor all the latest federal, state, county and city minimum wage rates
- Determine which rate applies to each location
- Sift through news alerts, blogs, agency websites – and more
- And, you may have to consult with inside or outside legal counsel
GovDocs Minimum Wage
In response to these challenges, GovDocs is thrilled to announce a new product at SHRM next week. Stay tuned for details!
Want to download the webinar recording?
Download the recording of the webinar here.