New Minimum Wage Increase in Rhode Island

Published 10/12/2020

 

Only 9 States Have a Higher Minimum Wage Than Rhode Island

 

 

As of last Thursday, only 9 states (and Washington D.C.) have a higher minimum wage than Rhode Island. Rhode Island has the 12th highest cost of living in the country, so it's position in the wage rankings is not surprising. Throw into the mix that Rhode Island has the 4th highest percentage of workers (19%) represented by unions, and the picture becomes clearer.

 

In a 2019 CNBC article, Rhode Island was reported to have the 7th highest cost of doing business (although, with the new minimum wage going into effect, this could change). Small wonder that the same article rates Rhode Island dead last for business rankings, it's fifth time as the bottom state.

 

In a September 17, 2020 press release in RI.gov, it was announced that the August unemployment rate in the state increased to 12.8%, while the U.S. rate dropped to 8.4%.

 

As reported in the Boston Globe last Thursday...

 

"Today’s increase marks the first time the minimum wage has gone up in the state since January 2019, although you might recall that before the pandemic, there was a push to phase-in to a $15 an hour minimum wage over the next several years. That proposal fell apart, but the bump to $11.50 an hour was signed into law by Governor Gina Raimondo in March.

 

Here’s how our hourly rate compares to the rest of New England:

 

Massachusetts – $12.75

 

Connecticut – $12

 

Maine – $12

 

Rhode Island – $11.50

 

Vermont – $10.96

 

New Hampshire – $7.25

 

According to the US Department of Labor, Arizona, California, Colorado, New York, Oregon, Washington, and Washington, D.C. also have higher minimum wages than Rhode Island."

 

There are some exceptions to the minimum wage and overtime pay rules. Specifically...

 

·     Full-time students under 19 years of age working in nonprofit religious, educational, librarial, or community service organizations, who earn $9.45 per hour.

·     Workers ages 14 or 15 who do not work more than 24 hours in a week. These employees earn $7.88 per hour.

·     Workers employed in domestic service in or about a private home, federal service, or voluntary service in educational, charitable, religious, or nonprofit organizations where employer/employee relationships do not exist.

·     Employees receiving gratuities, like restaurant and hotel employees, and certain employees of nonprofit entities. The tipped wage is $3.89.

 

 

WHAT COMES NEXT?

 

As reported by Colleen Egan, in squareup.com, "The National Federation of Independent Business pushed back against the proposed increases, claiming that they would hurt small businesses that can’t afford the continued wage hikes. However, the state’s minimum wage has increased nearly every year since 2013. It remains to be seen whether there will be a rise in the 2020 minimum wage."

 

WHAT CAN YOU DO?

 

As suggested by Ms. Egan...

 

"Here are some other steps you can take to make sure your business is ready if the minimum wage does increase:

 

·     Evaluate your staffing: Take a look at your hourly, weekly, and monthly sales to determine if your current staffing levels are appropriate. Based on those sales and the rest of your finances, make a plan for any future hiring. Maybe you need to add a new full-time employee each year. Or maybe your sales are seasonal and hiring contract employees during your busy seasons makes more sense.

 

·     Hire the best: Hiring the right people is always important, but doubly so when you operate a small business. So take your time and cast a wide net when recruiting new employees. And once you have your team in place, make employee retention a priority by offering a path to growth and development and by making your business an attractive place to work

 

·     Upgrade your technology: When you automate complicated, time-consuming aspects of management, like payroll, you can spend more time focusing on issues like staffing and growing your business.

 

Regarding evaluation of your workforce, as well as hiring the best, Available Staffing Network is ready to help. Please feel free to give us a call to discuss what you can do to weather the storm and come out stronger on the other side.