Is Your Payroll Software Minimum Wage Compliant?

How do you know which minimum wage rate to use when you pay employees that work in multiple states?  Your payroll software program should be in compliance with the Department of Labor (DOL), which states, “Where the Federal and state law have different minimum wage rates, the higher standard applies” and use the appropriate rate when doing automatic calculations such as Tips Make Up pay.

As of 01/01/2010, there are 5 states that have a lower minimum wage than the federal rate of 7.25; they are AL, CO, GA, MN and WY.  There are 26 states that have the same rate as the Federal, and 10 states (AZ, CO, FL, MO, MT, NV, OH, OR, VT, and WA) that the minimum wage rate is linked to a consumer price index. As a result of this linkage, the rate is normally increased each year, usually around January 1st. However, this year on 01/01/2010, these states, with the exception of Colorado, kept their minimum wage rate the same as what is was in 2009.

Make sure your payroll software is Minimum Wage Compliant!

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Assistant Vice President Corporate Accounting/Payroll Melody Wieczorek, Sterling Bank & Trust

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