Minimum Wage Changes

22 states have raised their minimum wage in the new year, and 38 cities and counties are taking it a step further and raising wages above their state requirement. California, for instance, is raising its minimum wage to $16 per hour across the board, though in the coming months, fast food workers will find their wages raised to $20 per hour, and many in the healthcare industry will be paid $23 per hour. The state of New York raised its minimum wage to $15 per hour, while New York City’s wage increased to $16. The state expects to continue raising wages over the next few years.

 

Time will tell how these changes affect companies. Many believe that higher labor costs can have an adverse effect on small businesses and create potential job losses in larger companies. There is also a concern that raising wages can ultimately lead to reduced compensation for hourly workers, as some companies may cut hours or benefits in order to stay within budget. On the other hand, others believe that as the cost of living rises across the country, increased wages will lead to higher financial security in employees, potentially increasing productivity and job retainment percentages.

 

With these potential outcomes in mind, companies must prepare for and adjust to the new laws.

“Adjusting to these new minimum wage laws involves a careful balancing act,” explains Jennifer Morehead, CEO of Flex HR. “Companies must find ways to sustain business growth while ensuring that they’re providing fair compensation to employees. Potential adjustments in pricing, budgeting, and staffing levels may need to be made to offset increased labor costs. Additionally, employers must ensure payroll systems are updated to accommodate these new wage standards. Failure to comply could result in penalties, back pay obligations, and reputational damage.”

 

 

Paid Leave

Many states have also increased their allowances for paid leave. 14 states, in addition to Puerto Rico and Washington, D.C., have implemented required paid leave for serious employee health conditions or disabilities. With the exception of Puerto Rico and Hawaii, these mandates apply to family leave as well, which includes spending time with a new child and caring for an ill family member. Minnesota has introduced six days of sick leave, while Illinois now requires that employees be given five paid days off for any reason.

 

The impact of these new leave laws on companies will vary depending on the size and industry, as employers will have to accommodate modest increases in sick leave costs. However, most studies show that having access to paid sick leave increases employee productivity. These new laws may serve as an opportunity for employers to shift company culture to prioritize physical and mental health, allowing employees to feel more supported. This can eventually lead to improved morale and higher profits.

 

Recruitment and Hiring Practices

Pay Transparency

Pay transparency is an increasingly popular trend in hiring practices. Hawaii recently instituted a pay transparency law that requires businesses with more than 50 employees to list a salary range that reasonably reflects earnings in all external job postings, while Colorado’s previously existing transparency laws have been enhanced to require businesses to detail application deadlines and application processes. California, New York, Illinois, and Washington State have all also adopted similar laws.

 

Drug Testing and Cannabis

Washington State and California have introduced new rules regarding drug testing and transparency. Both states prohibit employers from refusing to hire a candidate based on the presence of cannabis metabolites in a drug test. California also restricts employers from asking about prior cannabis use in the interview process and protects employees from being fired over cannabis use outside the workplace.

 

Sealed Criminal Records

New York is the latest state to enact legislation that seals the criminal records of previously incarcerated individuals. With the exception of murder and other violent crime convictions, felony convictions can now be sealed after eight years and misdemeanors after three. Eleven other states have previously instituted similar laws, which aim to protect workers from discrimination in hiring due to past incarceration.

 

The new laws may require employers to make adjustments to their hiring and recruitment processes. To comply with pay transparency laws, employers may need to conduct thorough market research to set competitive and fair salary ranges for their positions. Employers may also need to revise their drug testing policies to exclude cannabis or to specifically account for the legal use of cannabis outside of work. This might involve redefining impairment and revising the criteria for post-accident drug testing. As states aim to make the workplace more inclusive, companies will likely also have to reevaluate their background check and anti-discrimination policies.

 

As employment laws continue to change with the times, it is essential that employers stay up to date with evolving requirements in order to stay compliant. “In the face of these changes, our focus at Flex HR is on staying informed and proactive,” Morehead states. “By doing so, we can continue to support our clients and our employees, ensuring that we adhere to new laws and seize the opportunity to enhance our workplace culture.”

 

Though some of these changes may result in upfront costs to companies, many of them will also likely aid in transforming workplaces into safer, more inclusive, and ultimately more productive spaces. It is essential not to resist change but to embrace and adapt to it, balancing the challenges with the potential for benefit.

Contact Flex HR today to be your HR support at info@FlexHR.com.