Is your business prepared for a minimum wage increase? A quick update from http://poplarfinancial.com (poplarfinancial.com)!

Many states across the country have recently raised the minimum wage, and more changes are on the horizon.

Even an increase of $.75 an hour for 20 employees can mean an annual payroll increase of more than $20,000. Seemingly small increases can leave you wondering how to manage this new expense.

There are several steps you can take to adjust to recent state legislative changes or to prepare for upcoming payroll increases that are rolling out in the months ahead. (See the table below to determine if your business operates in one of the affected states.)

What can you do to stay ahead?  

1. Evaluate expenses and revisit your budget Once you determine if and how new minimum wage legislation will affect your business, it’s time to look at the big picture. New payroll costs may have implications for how you manage other expenses like utilities, inventory, supplies, and out-sourced work or third-party relationships.

By listing and evaluating existing or anticipated expenses you can create a comprehensive budget and determine what, if any, cuts or changes you’ll need to make.

1. Don’t forget payroll taxes Higher minimum wage rates also mean higher taxes. As you budget for your new payroll obligation, it’s important to account for increases in Social Security and Medicare expenses as well as taxes on things like disability and unemployment insurance.

2. Make strategic cost cuts Many business owners assume the way to address payroll increases is to make staffing changes or pass costs off to customers. But before you cut employee hours or raise prices, determine if there are any other cost-saving measures you can take.

For example, can you work with suppliers or vendors to negotiate better costs? Are you paying for services that you no longer need or are cheaper elsewhere? Of course, “cheaper” isn’t always better. Before making drastic cuts or going with the cheaper option, make sure it can accommodate your needs without jeopardizing the customer experience or operational efficiency.

Is your state on the list?  

According to the Fair Labor Standards Act https://www.dol.gov/whd/minimumwage.htm ((FLSA)) of 2009, all employers are required to pay employees the federal minimum wage, which is $7.25. However, many states also have their own minimum wage laws.

More than twenty states and jurisdictions have already taken steps to adjust minimum wage in 2019, with some implementing immediate changes and others using a gradual approach that will take place over the next several years.

Minimum Wage Rate Increases by State1

Alaska

$9.89

Indexed annual increases based on consumer price index (CPI)

Arizona

$11

$12.00 by Jan 1, 2020

Arkansas

$9.25

$10.00 by Jan 1, 2020

$11.00 by Jan 1, 2021

California

$12

$13.00 by Jan 1, 2020

$14.00 by Jan 1, 2021

$15.00 by Jan 1, 2022

Colorado

$11.10

$12.00 by Jan 1, 2020

Delaware

$8.75

$9.25 by Oct 1, 2019

D.C.

$13.25

$14 by July 1, 2019

$15 by July 1, 2020

Florida

$8.46

Indexed annual increases based on consumer price index (CPI)

Illinois

$8.25

$9.25 by Jan 1, 2020

$10 by July 1, 2020

$11 by Jan 1, 2021

$12 by Jan 1, 2022

$13 by Jan 1, 2023

$14 by Jan 1, 2024

$15 by Jan 1, 2025

Maine

$11

$12 by Jan 1, 2020

Annual CPI increases starting Jan 1, 2021

Maryland

$10.10

$11 by Jan 1, 2020

$11.75 by Jan 1, 2021

$12.50 by Jan 1, 2022

$13.25 by Jan 1, 2023

$14 by Jan 1, 2024

$15 by Jan 1, 2025

Massachusetts

$12.00

$12.75 by Jan 1, 2020

$13.50 by Jan 1, 2021

$14.25 by Jan 1, 2022

$15 by Jan 1, 2023

Michigan

$9.25

$9.45 by March 29, 2019

$9.65 by Jan 1, 2020

$9.87 by Jan 1, 2021

$10.10 by Jan 1, 2022

$10.33 by Jan...