New Minimum Wage Laws Leading to Border Wars?

Boosting minimum wage was a big theme at the state level last year. As a result, the minimum wage rates in at least 30 states are going up in 2015. Although minimum wage at the federal level remains unchanged, wide-ranging minimum wage requirements for states are putting pressure on companies to compare their own standards to those of the neighboring states. And while a company may have the advantage of paying lower wages for their employees under the state’s minimum wage standards, the disadvantage lies in the labor pool when potential staff are crossing the border to a state that pays better. “The wage disparity between neighboring states creates an interesting dynamic that employers near certain state borders should take into consideration,” says Lisa Schmid, a labor and employment attorney at Nilan Johnston Lewis. “If you’re hiring minimum wage employees and yet you pay one or two dollars less than a similar business a few miles away and across the border, it could create a challenge for hiring and retaining the best talent.” Contact Lisa Schmid at (612) 305-7549 or lschmid@nilanjohnson.com, or Angela Deeney at (651) 789-1277 or angela@kohnstamm.com.

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