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July 10, 2018
March 11, 2019

How Do Increases in the Minimum Wage Affect Your Team?

Sheila Grosdidier
SCP

Let’s look at the numbers of what has happened already this year:

5.2 Million

The number of workers who received a pay increase due to state minimum wage increases on January 1, 2019.

8

The number of states (AK, FL, MN, MT, NJ, OH, SD, and VT) that had an automatic adjustment for Inflation. This is a result of aligning the increase in wage with the increase in prices from the prior year.

29

The number of states that have a higher state minimum wage than the federal level of $7.25

5

The number of states (CA, DE, MA, NY, and RI) that set the minimum wage based on the laws set by the state legislature.

15

The rate, $15/hour, to which California, Massachusetts, and New York will continue to raise their minimum wage.

6

The number of states (AZ, AR, CO, ME, MO, and WA) that had wage increases because voters stepped in when state government failed to do so.

350,000

The number of Amazon employees who learned that the minimum hire rate for positions at the company would be $15/hour.

More than 1

The number of team members at your practice wondering right now, “Why did minimum wage employees just get a raise and I didn’t?”

Even if no one is saying it, you can be assured, there’s someone pondering the answer to this question. What should you know about this change?

  1. The minimum wage has failed to keep pace with the inflation rate and these current changes are to correct that lag.
  2. If you make above the minimum wage, your wage rate is based upon several factors – skill level, experience, competition (how many can do your job?), geographic location, seniority and overhead costs of the business. It’s not typically based upon the minimum wage factor.
  3. Employees need communication about how their wage is determined and what influences their ability to increase wage. Here are ways to clearly communicate wage to your employees:
    a. Complete a yearly compensation statement- (example) review with your team members individually what is included in compensation – vacation/PTO, uniforms, continuing education, insurance, discounted veterinary services, bonuses, incentives, certification, licenses, etc.
    b. Take a transparent position – talk about wage and discuss the business side of the business. Your team sees many dollars coming into the practice but what do they know about the overhead costs? Let your team know that you are happy to discuss how their hourly wage has been determined.
    c. Become a performance-based employer. Instead of giving raises based solely on length employment, give wage increases based upon performance and how well someone accomplishes their job. When someone meets a certain criterion for their position, then increase their wage. This is often seen in tiered job descriptions where there are established levels of skills, abilities and knowledge for a position (example: Receptionist I, Receptionist II, Receptionist III) and a pay range is established. Explain that if they want to improve their wage, there is the road map.
    d. Reward a job well done consistently and fairly between employees. Be sure to identify the achievement and the reward so others can accomplish the same result.

It’s time to discuss this topic with your team. Don’t let the chatter continue to occur without your input, guidance, and openness to speak honestly and professionally about your team’s concerns or confusion over wages. You will be glad you did.

https://www.epi.org/blog/over-5-million-workers-will-have-higher-pay-on-january-1-thanks-to-state-minimum-wage-increases/

https://www.marketwatch.com/story/5-unexpected-ways-raising-the-minimum-wage-helps-workers-2018-10-03

Learn everything you need to know about compensation and human resource management at our H.R. Boot Camp in a location near you.

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