The Fair Labor Standards Act (FLSA) sets federal minimum wage standards that states must follow unless they have a higher state minimum wage law. Montana’s minimum wage law pays employees at a rate of $9.20 per hour, which is higher than the federal rate of $7.25 per hour.
The minimum wage is the lowest amount of money per hour that an employer can legally pay their employees. This means that employers in Montana can’t pay employees less than this amount no matter what their industry or type of business is and that seasonal or part-time employees must also be paid this rate.
Even if your employer breaks any of these rules, you’re protected by law, and any wages that were illegally withheld should be returned to you.
- What Is the Current Minimum Wage in Montana?
- Why is a minimum wage needed?
- What are the different types of wage rates in Montana?
- Standard Minimum Wage
- Under 20 Minimum Wage
- Tipped Minimum Wage
- Student Minimum Wage
- How should small business owners adapt changes to the minimum wage in Montana?
- Figure out your expenses
- Automate your payroll system
- Evaluate hiring practices
What Is the Current Minimum Wage in Montana?
The state of Montana is expected to raise the minimum wage from $9.20 to $9.95 an hour on Jan. 1, 2023. This means that employers will have to pay their employees more to compensate for their labor starting in January of that year. Still, it also means that people currently earning the minimum wage will be better off come January.
Why is a minimum wage needed?
The concept of a minimum wage was created to ensure fairness for workers. While employers will naturally try to pay as little as possible to stay competitive, a minimum wage exists to prevent them from paying so little that it’s impossible for employees to make ends meet.
In addition, some jobs require skills that come with training and experience, which should be considered when determining how much to pay someone. For example, someone who has worked in the service industry for several years might be able to provide better customer service due to their expertise and knowledge of the company’s operations. Employers should compensate people fairly for their hard work and training by paying them more than the minimum wage.
What are the different types of wage rates in Montana?
The minimum wage is the lowest hourly rate an employer can legally pay an employee. The Fair Labor Standards Act (FLSA) establishes a federal minimum wage, which applies to all states. However, not all states have adopted the federal minimum wage. Montana’s minimum wage law also includes provisions for different types of employees:
Standard Minimum Wage
The standard minimum wage is the minimum an employee must pay per hour in a given state. This varies from state to state, but it is not uncommon for the federal and state governments to have different minimum wages. In Montana, the standard minimum wage will be $9.95 per hour, effective January 1st, 2023.
Under 20 Minimum Wage
If you are under 20 years old, your employer may pay you less than the standard minimum wage if you work for at least 90 days in a calendar year and do not work more than 30 hours per week. The under-20 minimum wage in Montana is $4.25 per hour.
Tipped Minimum Wage
Montana law does not allow employers to take tip credit. The minimum wage applies to all employees in Montana, including tipped employees such as waiters and waitresses. In other words, employers may not take a tip credit against their minimum wage obligations.
Suppose the employee does not receive enough tips to make up the difference between the cash wages paid by his or her employer and the applicable minimum wage. In that case, the employer must make up the difference for the employee to earn at least the applicable minimum wage per hour.
Student Minimum Wage
The student minimum wage is $7.82 per hour for up to 20 hours per week at certain employers. This exception applies only to students enrolled in an accredited secondary school or institution of higher learning and working part-time.
How should small business owners adapt changes to the minimum wage in Montana?
In the coming months, small business owners will be working to determine how this change will impact their businesses.
To prepare for these changes, small business owners should do the following:
Figure out your expenses
The first thing to do is figure out how much your employees make now and how much they’ll make when the new minimum wage goes into effect. Then, think about what other expenses will go up as well. For example, if you pay health insurance for your employees and their families, those costs will also rise.
Automate your payroll system
This is something that any small business can do easily: automate payroll, so it’s done automatically every week or two weeks instead of having to pay each employee on payday manually. You can also find software programs that allow you to track employee hours and automatically calculate their paychecks based on those hours worked.
This is an easy way for a small business owner to ensure everyone gets paid what they’re owed without having to sit down with each employee every week or two weeks and figure out exactly how much money they need from each paycheck.
Evaluate hiring practices
Once you know how much you’ll need to pay your employees, you’ll want to assess whether or not your hiring practices need updating. If you’re looking to add new employees to your team, now is a great time to consider how they fit into your company culture and job descriptions before starting to work with you full-time.
It’s also important to evaluate current practices such as overtime or whether employees are eligible for benefits. It should be addressed before these changes take effect on January 1st, 2023.
As more states begin to adopt minimum wage increases, business owners will have to adjust their practices and ensure they comply with the state’s minimum wage requirements. While some view these changes as beneficial to businesses, others may feel they are problematic. Either way, each business owner should know how federal, state, and local laws change their business.