The cost of living in New York is quite high and people may struggle to afford rent and other basic necessities if all they earn is minimum wage. Some families benefit from more than one adult who juggles multiple jobs and still struggles to make ends meet. Lawmakers, in their attempts to ensure that those who depend on hourly wages to support their families can live, have suggested increasing the minimum wage again.
In fact, despite the fact that New York’s minimum wage is higher than the federal minimum wage and what many other states require, there have been discussions of increasing the minimum wage by as much as $6 an hour over a period of years.
Obviously, an increase in hourly wages will increase operating costs for businesses, especially those operating in the leisure and hospitality industries, where low wages and gratuities often help take the pressure off of employers. In addition to direct payroll expenses, a higher minimum wage will likely also mean higher insurance costs.
Certain kinds of coverage cost more when wages increase
The benefits that workers receive through employer-sponsored insurance programs will increase in value if they earn higher wages. Workers’ compensation coverage, for example, will replace a percentage of someone’s average weekly wage. Therefore, the more they earn, the more the coverage will cost.
A $6-per-hour increase in wages would not just lead to thousands of dollars in additional payroll expenses each month but also substantial increases in employer insurance premiums. Businesses may find themselves struggling to cover all of these costs without passing those additional expenses onto the public.
Tracking policy helps businesses plan for the future
Organizations that only ever react to changing policies will always be a step behind their competitors. Those that actively track political changes that could affect their business will have an easier time adjusting their policies. For example, a hiring freeze might be necessary for businesses concerned about wage increases in the immediate future. Changing internal wage policies might also be a way to prevent the company from struggling with major changes following an increase in the minimum wage.
Keeping an eye on changing employment laws that could affect costs like workers’ compensation insurance premiums can help companies better comply with regulations and protect themselves against business liability. In the event that questions or concerns arise, seeking legal guidance is generally a good first step forward.
