It’s the Year of the Worker: Big Labor and the Little Guy
In a milestone decision, New York Governor Andrew M. Cuomo and California Governor Jerry Brown become the latest to add their states to the increasingly long list of locations boasting a $15 per hour minimum wage. Now the questions on everyone’s mind, no matter which side of the fence you sit on this subject, is “how does this affect me?” and “how does this affect my business?,” to name a few.
It’s Not Federal… Yet
If you are not sporting a license plate that says “The Golden State” or “I Love New York,” chances are you have nothing to worry about (for now). These bills, now signed into law, only pertain to their respective states. So, unless you live, work, or own a business in California or New York, take a deep breath. You don’t need to scour all the .gov sites for information just yet. Everything is halted at the state-level. It will be up to the federal government, and likely the next commander in chief given the short 7 months until the presidential elections, to mandate a higher minimum wage nationwide.
Let’s Talk Specifics
Fortunately or unfortunately, regardless of your status as an employee or a business owner, your bank account won’t see the final results for this legislation until anywhere between December 2018 and January 2023, pending any “off-ramps” resulting from economic conditions. These “off-ramps,” also known as a safety net, are written into the laws of each of these states as a pause the minimum wage increase in the event of an economic downturn or halt to expected economic expansion.
Both California and New York are taking a measured and continued approach to the increase to avoid a ‘sticker shock’ type feeling among businesses. Depending on the size of your business, each year adds a monetary increment to the minimum wage until $15 per hour is reached. Under the new law, California minimum wage will rise to $10.50 per hour, which is an increase of .50 from the current rate, on January 1, 2017 for businesses with 26 employees or more. The wage rate will continue to rise gradually, culminating at $15 per hour by 2022. If a business has 25 employees or fewer, the state of California “allows additional time for these employers to phase in the increases,” according to the office of Governor Brown (Office of Governor Edmund G. Brown Jr. , 2016).
New York quickly followed the example set by California, and then some. In addition to their own minimum wage increase, residents of New York will benefit from a 12-week paid family leave. After 6 months of employment, employees will be eligible to receive paid leave on behalf of “caring for an infant, a family member with a serious health condition or to relieve family pressures when someone is called to active military service.” This benefit will be incorporated at 50% of weekly wages, subject to a cap, in 2018 followed by an additional, and final, increase in 2021 at 67%, also subject to a cap. Senate Independent Democratic Conference Leader Jeffry Klein and Senate Democratic Leader Andrea Stewart-Cousins both agree that, as a result of this new law, New York will have the “best paid family leave” and “strongest paid family leave” in the nation, respectively. New York’s minimum wage changes get a bit more specific than California by differentiating the increase amongst areas within New York and defining large businesses as 11 employees or more and small businesses as 10 employees or less. Large businesses in New York City will raise their minimum wage pay rate from the current $9.00 per hour to $11.00 by 12/31/2016 followed by a gradual increase until 12/31/2018, settling at $15.00 per hour. It will be similar for small business in New York City barring $10.50 per hour instead of the previously mentioned $11.00 by 12/31/2016. After this, there will be a gradual increase to $15.00 per hour ending 12/31/2019. Employees in the counties of Nassau, Suffolk and Westchester will this same strategy except their ending 2016 rate will be $10.00 per hour with an increase continuing until 12/31/2021. The remainder of the state will see a $0.70 increase beginning by 12/31/2016 and continuing until 12/31/2020 where it will be $12.50 per hour. At this point, the Director of the Division of Budget and the Department of Labor will reassess the schedule and continue the increase until $15.00 is reached.
Why Does This Matter to the Electronic Security Industry
If you live, work, or own a business in New York or California, this upcoming change can affect you. Business owners and those in related positions within their companies will need to familiarize themselves with the new laws and strategize their own implementation. Do you implement each stage of the increase all at once or should you take a cue from the government and stagger it, allowing for a little more ease on your budget. If you own a security business in Suffolk County, New York, should you instigate a subtle $0.12 increase each month to lessen the blow in December when you will need to be at $10.00 for all of your minimum wage workers? If you are an employee in these areas, you too should be aware of the structure for the raise. If you are expecting your next check to reflect $15.00 per hour and have already begun spending the anticipated additional funds, you may be in for a surprise. Knowing what to expect can help you budget accordingly, no matter your status as employee or business.
According to the Electronic Security Association’s 2013 Wage & Salary Study, the new laws could affect entry-level sales, entry-level installation technicians and possibly any administrative, customer service or clerical positions. While the immediate changes are limited to California and New York, other states are taking notice. Although we have not seen a federal change to the minimum wage rate since July 2009 where it was increased to $7.25 per hour (United States Department of Labor, 2009), many cities and states are taking it upon themselves to establish a wage they deem more appropriate. Much like we saw with the legalization of gay marriage, the waterfall of joining in this minimum wage movement may have begun. For the many states whose minimum wage equates to below the Federal Poverty Level ($24,300 for a family of 4 in 2016 (National Conference of State Legislatures, 2016)), they may be next to make a change. Security businesses and their employees in these states have the opportunity to take note from what is happening and find guidance in the execution by others who have already gone through it.
If we take a leap back in time to the days of the Fireside Chats with President Franklin D. Roosevelt and the first introduction of the Fair Labor Standards Act, we can see the goals set in motion in 1938 that are still at the forefront of society today. The FLSA sought to establish a floor for workers, guaranteeing a standard of living and began a path “toward a better standard of living and increase[s] purchasing power to buy the products of farm and factory” (Reich, 2013) , or in our case, video surveillance and fire alarm systems.
National Conference of State Legislatures. (2016, 4 14). State Minimum Wages| 2016 Minimum Wage By State. Retrieved from National Conference of State Legislatures: http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx#1
Office of Governor Edmund G. Brown Jr. . (2016, 4 4). Governor Brown Signs Landmark Legislation to Raise California's Minimum Wage. Retrieved from Office of Governor Edmund G. Brown Jr: https://www.gov.ca.gov/news.php?id=19368
Reich, M. (2013, June 25). National Minimum Wage Research Initiative: Media. Retrieved from National Minimum Wage Research Initiative: http://nationalminimumwage.co.za/wp-content/uploads/2015/09/1021-Reich-2015-Industrial_Relations-_A_Journal_of_Economy_and_Society.pdf
United States Department of Labor. (2009). Wage and Hour Division. Retrieved from United States Department of Labor: http://www.dol.gov/whd/minwage/chart.htm