The new year will ring in minimum wage increases in 21 states, with 4 more states and the District of Columbia implementing increases later in 2020. The highest minimum wage in 2020 will be $15.00 in Washington, D.C., effective July 1, 2020.
Paycor research found that 42% of surveyed organizations have negative feelings about their compliance management practices, in part because of limited resources and frequent changes to laws relating to minimum wage, paid sick leaves and pay equity laws.
The federal minimum wage for nonexempt employees remains at $7.25 per hour but if a state or local law requires a higher amount, employees must be paid at the higher rate. Arizona’s minimum wage rate is $12.00 for 2020.
It’s important for employers to stay on top of changes to minimum wage laws, as well as other wage and hour topics. Noncompliance can be costly – Employers paid a record $322 million in fiscal year 2019 to resolve wage and hour claims brought by the U.S. Department of Labor’s Wage and Hour Division (WHD).
WHD provides various online compliance resources for employers. It also launched a voluntary Payroll Audit Independent Determination (PAID) program, allowing employers to proactively investigate and correct overtime and minimum wage violations. Experts disagree on whether it’s a good idea for employers to participate, but the program is picking up steam. So far, more than six dozen employers have paid out more than $4 million in back wages to almost 7,500 employees via the PAID program.
Employers’ best defense to wage and hour claims remains a good offense. Overtime mistakes, improper misclassification and auto-deduct policies are frequent trouble spots. Employers can stay off WHD’s radar by keeping up with applicable federal, state and local laws, and by training front-line supervisors on compliant timekeeping policies and procedures.
Let Arcwood HR help you manage your wage and hour compliance. Contact us today to see how we can assist you in managing your employees and the ever changing employment laws.