Smart Benefits: What Does CT’s Minimum Wage Hike Mean for Multistate Employers?

Smart Benefits: What Does CT’s Minimum Wage Hike Mean for Multistate Employers?

The Fair Labor Standards Act (FLSA) establishes federal minimum wage standards for non-exempt employees, but many states have passed laws with higher rates. Connecticut is the latest in the region to increase its minimum wage incrementally from the current $10.10 an hour to $15 hourly by June 1, 2023, the same rate Massachusetts is rising to by January 2023.

But with Rhode Island’s wage set at $10.50 and New Hampshire only $7.25, it can be challenging for employers with offices in multiple states to make compensation decisions that comply. Here are best practices for multi-state companies:

• Review State Requirements: Carefully assess the laws in each of the states where you operate to determine if the minimum wage requirements differ from the federal rate. Remember that it’s where the employee works – not lives – that dictates the minimum wage that applies.
• Be Aware City Ordinances: In some US cities, especially those with a high cost of living, local ordinances have been adopted that provide for higher minimum wages than the state rate. Right now, the only New England municipality with a higher rate than the state’s is Portland, ME, but the trend is on the rise.
• Note Inflation Adjustments: In some cities and states with minimum wage laws, the rate is indexed for inflation and rises each year to account for cost-of-living price increases so pay attention to these automatic adjustments.
• Check for Exclusions: Some cities and states exclude certain businesses from the minimum wage requirements such as those with a small number of employees. Make sure to determine who’s covered and which businesses are exempt.
• Pay the Higher Wage: If your employees are subject to more than one requirement because your city or state rate is higher than the federal minimum wage, which is currently $7.25 an hour, pay the more generous rate.

 

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Rob Calise is the Managing Director, Employee Benefits of The Hilb Group of New England, where he helps clients control the costs of employee benefits by focusing on consumer-driven strategies and on how to best utilize the tax savings tools the government provides. Rob serves as Chairman of the Board of United Benefit Advisors, and is a board member of the Blue Cross & Blue Shield of RI Broker Advisory Board, United HealthCare of New England Broker Advisory Board and Rhode Island Business Healthcare Advisors Council. He is also a member of the National Association of Health Underwriters (NAHU), American Health Insurance Association (AHIA) and the Employers Council on Flexible Compensation (ECFC), as well as various human resource associations. Rob is a graduate of Bryant University with a BS in Finance