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03-Feb-2015

Wage increase brings varying opinions


Effective January 1, Nebraska’s minimum wage increased to $8.00 per hour. According to legislation, this wage will increase to $9.00 per hour on January 1, 2016. Nebraska is one of several states, including Alaska, Arkansas and South Dakota, that put a minimum wage bill on the mid-term ballot.  


These states will join 23 others who have already implemented a minimum wage that is above the federally mandated $7.25 per hour. The Nebraskans for Better Wages Coalition acquired 135,000 signatures from Nebraska residents to get the measure on the ballot. Though results of many issues on the ballot were in the GOP’s favor, the minimum wage initiative had bipartisan support statewide.

The Fair Labor Standards Act (FLSA) is the federal law that sets a minimum wage and dictates other employment requirements such as overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in federal, state and local governments.


Businesses that must comply with the FLSA are obligated to adhere to a minimum wage. Minimum wage differs in each state. The federal minimum wage has not changed since July 2009.


According to the Nebraska Department of Labor, the minimum wage pay rate is applicable to employers in Nebraska with four or more employees, even if the company doesn’t qualify under the FLSA.


Each state controls the minimum wage through its own legislation.


Federal minimum wage law supersedes state minimum wage laws where the federal minimum wage is greater than the state minimum wage. In those states where the state minimum wage is greater than the federal minimum wage, the state minimum wage prevails.

There are some states that set their minimum wage to change with the consumer index or inflation. These changes usually occur on an annual basis.


Nebraska currently ranks 43rd when it comes to wages earned by workers in the United States, and 95,000 workers (6.7 percent) in Nebraska earn less than $9.00 per hour, according to the U.S. Bureau of Labor Statistics.


Workers compensated by way of gratuities must be paid a minimum of $2.13 per hour by the employer. The sum of the wages and gratuities must be equal or exceed the minimum wage. The responsibility of proof for this is that of the employer.


Employees who are considered student-learners and are part of a bona fide vocational training program must be paid at least 75 percent of the state minimum wage. This provision also applies to full-time students in retail or service establishments, agriculture or institutions of higher education.


Youths under 20 years of age may be paid a minimum wage of no less than $4.25 an hour during the first 90 consecutive calendar days of employment with an employer. Employers may not displace any employee to hire someone at the youth minimum wage.


Nebraska has the third lowest unemployment rate at 3.4 percent (compared to the national average of 5.8 percent) as of October 2014.


There are a wide variety of opinions on the increase of minimum wage. Many who are for the increase see this as a way to give consumers more money to put back into the local economies. They also see it as a way to boost employment retention and to attract talent to a rural economy.


Those opposing this increase see it as a detriment to small businesses because they will likely have to increase prices and possibly eliminate positions. Some small businesses see an increase in minimum wage as a financial barrier to training and educating current workers.

With 2.3 million jobs added as of November 2014, the U.S. will see the best year for adding jobs since 1999. There is a national concern about minimum wage and the income earned for workers. It will certainly be an issue to follow both on state and national levels in 2015.
About the Author

Staff
Open for Business, Central Nebraska
The Open for Business Staff strives to create the most useful content possible for businesses. Whether it's tips and tools available for owners to work smarter, not harder, a feature story highlighting amazing things happening with a Central Nebraska business or a fun tip here and there, you will find something that helps your business thrive at openforbusinessmagazine.com 

    

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