Although a minimum wage hike would mean more expenses for small business owners in New Jersey and other parts of the country, 47 percent of business owners with revenues under $2 million support a minimum wage increase. That's the surprising result of a study of 600 business owners.
Many small companies support the pay raise because it would hopefully help reduce worker turnover. In addition, it would give employees more money, resulting in increased consumer spending. This would give a much-needed boost to the economy.
But it must be noted that the small businesses that support increased minimum wage the most are the ones not affected by raise. The hike would mostly affect companies in the retail and restaurant industries. In fact, the International Franchise Association has strongly opposed the pay increase.
All employers must be aware of new laws that affect their workers. Therefore, if the minimum wage is raised to $9 an hour - like President Obama proposed - then companies must abide by this law. In some states, there are other minimum wage laws that employers must follow. Besides minimum wage, employees who are not considered exempt must also receive overtime pay. This is equal to 1.5 times the hourly pay.
Having to pay employees more money has many implications for a business. It could lead to layoffs and an increased workload for everyone else. It also means less profit for the company. However, the only alternative is to not pay it - and face fines and legal action for failure to follow state and federal laws.
Source: Businessweek, " Why Small Business Is Divided Over Hiking the Minimum Wage," Patrick Clark, Nov. 21, 2013