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Many states and cities are jumping on the bandwagon of higher minimum wage requirements.  This is the future and even if there is no change to the federal law, states and cities are taking matters into their own hands with pressure from unions and other activists. Employers are now facing the question of how to implement these new laws without breaking the corporate bank account.

The examples below show the wide variation between these new minimums and the difficulties experienced by employers with multiple locations:

• Oregon: Oregon adopted a tiered minimum wage hike based on where the employee works within the State, ranging from $9.50-$9.75 now and up to a high of $12.50-$14.75 in 2022. 
• California: Los Angeles County’s hike is dependent on employer size and increased to $10.50 this year and up to $15.00 by July 1, 2020.  For smaller employers, the new schedule doesn’t kick-in until July 2017. The City of Los Angeles raised the minimum wage for any employee who works two or more hours per week within the city limits. 
• New York: New York implemented incremental annual minimum wage increases, which will reach $15.00 eventually and are dependent on employer size and location, similar to Oregon’s approach. Many more states and cities have enacted similar laws, or are considering implementing them soon.

Employers with workers in multiple locations are particularly hard-hit by this new trend and must analyze the new laws to determine the financial impact on the company. Budgets have already been prepared for this year – without notice of these new wage minimums. 

So what steps can employers take to minimize the financial impact and to properly comply with these new laws?  

• First, employers must ensure that they are aware of the laws in each state and locality where they have offices, employees or where employees only occasionally provide services. 
• Employers may reconsider where to locate their employees or not assign them to work in certain geographic areas to avoid the higher minimums. 
• Meetings may be cancelled or moved; territories changed; service areas dropped; deliveries rescheduled or contracted out to other companies. 

Businesses need to plan strategically for the impact of these new laws and more that are likely to come.