The new year brings new changes to minimum wage laws and regulations. For a restaurant owner or manager, these changes can have big impacts on your labor and payroll management. Make sure you are up to speed on the new laws so that you can effectively manage your workforce. This is also a great time to ensure that your technology systems are staying up to date with a changing regulatory environment.
What are the changes? The Economic Policy Institute (EPI) and the National Employment Law Project (NELP) have laid out which states are changing minimum wages and why. The EPI has a useful interactive map here.
There are 3 main reasons states are changing their minimum wage laws: cost-of-living adjustments, legislative votes, and ballots. 6 states (Arizona, Arkansas, Colorado, Maine, Missouri, and Washington) are raising their minimum wage due to the popular vote on ballot initiatives. 5 states (California, Delaware, Massachusetts, New York, and Rhode Island) are increasing the minimum wage due to legislation. 8 states (Alaska, Florida, Minnesota, Montana, New Jersey, Ohio, South Dakota, and Vermont) are increasing their minimum wage due to cost-of-living adjustments.
What should you do?
Step 1: See if and where the minimum wage changes impact you. The NELP provides a table for wage rates (tipped and non-tipped) in each state and local jurisdiction here. The table also shows planned future changes to minimum wages, which is important to keep on your radar.
Step 2: Ensure your technology is consistent with the changes to minimum wage laws and is correctly calculating earnings. If you operate in jurisdictions with different laws, pay particular attention to complicated use cases, such as one employee working in multiple jurisdictions, and thereby operating under multiple regulatory frameworks. For the busy restaurant owner or manager, it may be an efficient use of time to ask your technology provider to walk you through a demonstration of how your system is already adjusted to the new 2019 minimum wage laws.
Step 3: Brief your staff on changes to minimum wages and how it impacts them. It is generally considered a best practice to inform staff of changes to their paycheck before they receive the paycheck.
Step 4: Consider how this impacts your recruiting strategy. Higher wages will attract more productive workers. Your recruiting activities may need to adapt to hiring different employees with different expectations and capabilities. Think through your employer branding, recruiting channels, and evaluation process.
Step 5: Assess how new wages will impact your operating model. Your operating model may need to adjust to take full advantage of the opportunity afforded by more productive workers joining your team. Many restaurants are using recent wage rate increases, whether voluntary or regulatory, to deliver a higher level of customer service and a smoother customer experience.
Restaurant Magic Software has been providing advanced software solutions to the restaurant and hospitality industry for over 20 years. The robust Data Central Management Suite, the flagship product, is a powerful and flexible application that takes advantage of the latest technology trends to offer premier processing and analytics. To learn more about Restaurant Magic Software and its products, including the impact of 2019’s new minimum wage laws, call us at 1(800) 933-4711 or visit the website at RestaurantMagic.com.