How to Stay Compliant With the RI Minimum Wage Increase
As a Rhode Island business owner, it’s important to keep up with minimum wage changes. This includes knowing how to schedule employees correctly and keeping track of other wage and hour rules. An all-in-one payroll and team management solution can help you stay compliant.
This year the Rhode Island minimum wage is rising to $13. That means low-income workers will have less purchasing power than last year.
What is the minimum wage in Rhode Island?
When Rhode Island employers pay tipped workers, they must make sure that their total earnings including tips amount to at least the state minimum wage of $13. Unlike some other states and federal regulations, Rhode Island does not allow employers to pay tipped employees less than the minimum wage.
Most employers must pay their employees overtime if they work more than 40 hours in a week. Overtime pay is usually 1.5 times an employee’s regular hourly rate.
In addition to minimum wage and overtime, there are other state and local wages that employers must comply with when running payroll and scheduling employees. Using an all-in-one payroll and team management solution like Uprise will help ensure that you’re compliant with all of the different minimum wage rules across jurisdictions. It will also ensure that you’re not overscheduling or underscheduling your employees and paying them the correct amount. You can learn more about how Uprise can help with all your state and local minimum wage rules here.
What is the minimum wage for tipped workers?
The tipped wage is the minimum cash wage that employers must pay workers who receive tips (such as servers and bartenders). It can vary from state to state, and it can also be different than the federal tipped wage. The tipped wage is often used as a base for other types of wages, such as the minimum wage or overtime.
In Rhode Island, tipped employees must be paid the hourly minimum wage plus any tips received by customers. Employers may deduct credit card processing fees from employee tips, but only if the employer notifies the worker in advance and the deduction does not reduce earnings below the minimum wage.
Tipped restaurant workers are fighting to protect their hard-earned incomes. Many studies show that eliminating tip credits costs tipped restaurant workers thousands of dollars each year in lost earnings, and restaurants are 14 percent more likely to close as a result. Moreover, raising the minimum wage without protecting the tip credit will cost tipped employees even more money, and will harm small business owners and put jobs at risk.
What is the minimum wage for entry-level workers?
Many college graduates need to start out in entry-level jobs to build work experience and a resume. Raising the minimum wage cuts off the bottom rung of these workers’ career ladders and reduces opportunities for people who need to gain job skills and a foothold in the workforce.
Many states and cities have higher pay floors than the federal minimum wage, and dozens of large companies are raising their entry-level wages as well. These moves can help to create jobs, boost customer service, increase savings, and attract more professional candidates.
Nineteen states began 2021 with higher minimum wages, with five of these (Alaska, Arizona, Colorado, Maine, and Washington) automatically increasing their rates based on cost of living, while 17 (California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Minnesota, Rhode Island, and Vermont) raised their rates through ballot initiatives or previously approved legislation. The remaining seven states and the District of Columbia will raise their minimum wage by scheduled increments over the next few years.
What is the minimum wage for restaurant workers?
Depending on the industry and region, restaurant workers may be subject to different minimum wage regulations. For example, New York City restaurants must pay employees at least the standard federal minimum wage of $7.25 per hour for non-tipped workers and $2.13 per hour for tipped workers (assuming the difference can be made up by tips).
However, many restaurant delivery apps like DoorDash and Uber Eats say that this policy could throttle opportunities for their workers, while also increasing costs for consumers. In addition to absorbing the cost of labor, food-delivery workers must also cover their own expenses such as car insurance and taxes.
In order to maintain a competitive advantage, restaurants should remain up-to-date on their minimum wage regulations. This can help them attract and retain top talent, ensure that their employees receive a fair wage, and improve their overall profitability. Moreover, they must also understand how to implement effective tips to better compensate their staff and ensure that they are meeting their legal obligations.