The Raise the Wage Act, if passed, will increase the federal minimum wage for the first time in over a decade. We took this as a sign to delve into the laws behind minimum wage. Especially since minimum wage considerations play a large role in California start-up growth and operations.
Starting with these 5 Tips for Navigating Minimum Wage Laws:
Tip 1: Understand worker classifications.
Are they an employee or an independent contractor? If they’re an employee, are they exempt or non-exempt employee? These classifications matter.
Tip 2: You need to pay (at least) minimum wage to all employees.
And, no – founder’s equity doesn’t count! Employees can’t agree to be paid less than minimum wage – and you can’t offer benefits in lieu of wages.
Tip 3: Employee contracts offer essential protections and set expectations.
Employee contracts protect and empower both employers and employees. You need to get them right! This is especially true in a remote workforce.
Tip 4: Minimum wage entitlements for remote workers can be complicated.
Know the laws in every county and state your workers operate in (as well as federal laws) – and abide by them. Outsource if you can’t manage this in house.
Tip 5: There are serious consequences for non-compliance with local and federal wage laws.
In California, violations range from $50 per violation per worker per day to $1000 per worker per day. That’s in addition to paying the unpaid wage entitlements.
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