There is an ongoing debate in the U.S. over whether the minimum wage should be increased. If the government raises the federal minimum wage rise, human resources professionals would need to help their businesses change payroll for minimum wage-earning employees and transition to new methods of operation over time.
Proposed legislation
As The White House website states, in President Barack Obama's 2014 State of the Union address, he asked Congress to raise the minimum wage to $10.10 an hour. More recently, this past April, Democrats suggested raising the federal minimum wage to $12 per hour, according to The Washington Post. Currently, the federal minimum wage is $7.25 per hour. Some states, however, pay workers in minimum wage-earning positions more or less than this figure. Twenty-nine states pay workers more than the federally mandated minimum as of Jan. 1, 2015. Seattle pays the highest minimum wage in the nation: $15 per hour.
The last time Congress raised the minimum wage was in 2007 when it moved from $5.15 to its current level. This transition occurred over a three-year period. The recommendation from Democrats today is to reach $12 by 2020.
Who would this change affect?
The entire country would be affected in one way or another should the minimum wage increase to $12. More directly however, 38 million Americans would begin earning more than they do now. In particular, as American Progress pointed out, women would be among those most affected. Today, more than half of all workers earning minimum wage are women who have at least some college education. About 33 percent are mothers and 45 percent are non-white. An increase in minimum wage would help these women support their families and complete their degrees.
The change would also have a huge impact on employers, especially small-business owners. For example, The Guardian reported California increased its minimum wage from $9 to $12.25, effective in March. This 36 percent increase has had a big effect on the small-business sector, as the price of goods has increased in some areas and companies added service charges to some existing pricing.
Some small business owners are worried an increase in minimum wage will put them out of business. Many don't know how they would afford to pay entry-level workers $15 per hour. In some start up owner's eyes, this also decreases the number of positions open to recent graduates looking to get their feet wet at their first real job. However, higher wages are known to decrease employee turnover. Younger workers are often eager to breeze through their roles to find their next job; rather than having to endure a unstable game of catch-and-release, a higher minimum wage could help small business owners and start up companies keep employees on board longer.
What will HR need to do?
Human resources professionals need to be prepared to transition their workplaces should the Raise the Wage Act pass. As any change would likely happen over a specified period of time, HR needs to equip itself with the tools to make that transition easy on employees, while maintaining strong sales figures and profits for the organization. It may also require re-working of benefits packages and scheduling.
A robust HR platform can help facilitate clearer discussions between C-level management and their employees. In addition, outsourcing HR tasks for projects related to performance management, employee reviews, strategic planning and exit interviews can offer small- and big-business owners alike an opportunity to provide support to their existing human resources department