Minimum Wage for Small Manufacturers
Must know facts about minimum wage that will affect your business
Small manufacturing companies employ more minimum wage workers than most other types of small businesses, so it's critical to know the minimum wage rules. Between July 2007 and July 2009, a three-step series of Federal minimum wage increases have boosted the hourly rate nearly 40 percent to $7.25 per hour, placing even more pricing pressure on small manufacturers already dealing with recession and high energy costs.A few states have ever higher minimum wage levels, so the impact of changes to federal minimums depends on what state you do business in. What's more, states often raise their minimums to reflect federal changes, so state levels may shift as well. If employees are subject to both state and federal minimum wage laws, they are entitled to the higher amount.
The minimum wage, as well as overtime pay, record-keeping requirements and youth employment standards are set by the Fair Labor Standards Act (FLSA). The U.S. Department of Labor FLSA compliance web page has detailed guidance on which workers are covered under minimum wage and overtime pay standards, along with a helpful Q&A.
Check the latest on minimum wage laws in your state
State laws are seldom simple, but generally, businesses in 19 states faced minimum wage increases when the first round of federal changes started in 2007. The U.S. Department of Labor (DOL) has a handy color-coded, online map showing states with higher, lower and the same as the federal standard, as well as those with no minimum.
Download and display the new minimum wage poster
Free posters are available from the DOL, or for purchase from numerous private legal compliance firms you can find online. Every employer subject to the FLSA minimum wage provisions must post and keep posted a notice explaining the Act in a conspicuous place where employees can easily read it. You can view and download a free poster at the DOL website. Posters are in PDF format, in large or small size, and your choice of color or black-and-white.
Answer all your minimum wage questions
How does the federal minimum apply to workers who receive tips? What about young or full-time student workers? What are the requirements on overtime? The Wage and Hour Division of the DOL has an excellent minimum wage FAQ section that will answer these and other common questions about minimum wage laws. You can also find a selection of helpful and free compliance assistance materials and information at the DOL site.
More minimum wage tips and tactics
- Federal rules do not require extra pay for weekend or night work. However, covered, nonexempt workers must be paid at least time-and-a-half for time worked over 40 hours in a workweek.
- The Full-time Student Program is for full-time students employed in retail or service stores, agriculture, or colleges and universities. Employers can obtain special certificates from the DOL that allow payment at 85 percent of the minimum wage.
- Pay raises to amounts above the federal minimum wage are not required by the FLSA.
- The FLSA has no requirement for double-time pay. This is a matter of agreement between an employer and employee.
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