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As Walmart Raises Its Minimum Wage, Some Legal Reminders for GCs

By Mark Wilson, Esq. on February 19, 2015 | Last updated on March 21, 2019

The hot business news today: Walmart is raising the pay rates for its lowest-paid workers, its full-time and part-time "associates." Hourly full-time workers will earn at least $10 an hour by February 1, 2016, while hourly-part-time workers will earn at least $9 an hour starting this April, Reuters reports.

It's great that Walmart recognizes the need to increase wages, but the average hourly wages for full-timers and part-timers is going up by only 15 and 52 cents an hour, respectively. What should GCs keep in mind about raising wages?

Business Expenses

An increase in employee pay rates doesn't just impact the company in the form of the wage being paid, but also in the payroll taxes that accompany the wage. For example, CNN Money explains that a daycare business in New Jersey, where the minimum wage increased by $1 an hour on January 1, is facing a 10 percent increase in payroll expenses.

Ultimately, however, even though some think tanks claim that raising the minimum wage results in layoffs, that's usually not the case, especially for service industries like restaurants that can't make do with less staff or outsource or automate their workforce.

State by State

When states enact different regulations, businesses with large lobbying arms have very public pity-parties in which they lament their inability to keep up with a patchwork of regulations inflicted on them by mean old states. One answer, of course, is to have a single policy that can travel around the country.

Piecemeal compliance with different jurisdictions' regulations reaches its absurd conclusion at a mall in California, where part the mall is in the city of Santa Clara and the other half is in the city of San Jose. San Jose requires a $10-an-hour minimum wage, while Santa Clara does not.

Exempt Employees

California's labor laws are quite different from those in the rest of the country. It's the only state where you get to bank some of your paid time off, and overtime kicks in at more than eight hours a day, not just more than 40 hours a week. And, believe it or not, California's minimum wage affects salaried employees too. California mandates that full-time exempt employees (those who don't qualify for overtime pay) have to earn at least twice the state minimum wage as a pay rate.

Bottom line: If your company is considering a minimum wage hike, make sure that your pay practices are legal so that you don't end up on the wrong end of the increasing number of wage and hour violations.

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