Connecticut Minimum Wage Set to Increase to $15
The minimum wage in Connecticut is scheduled to increase to $15 per hour on June 1, 2023. This is the final step in Governor Lamont’s five-year plan to raise the minimum wage from $10.10 per hour to $15 per hour.
The increase in the minimum wage is being considered by many as a victory for working families; more than 400,000 workers in Connecticut stand to be see a positive impact, many of whom are disproportionately women and people of color. The minimum wage increase is also expected to give a boost to the state’s economy by increasing consumer confidence and overall spending.
Effect on Small Businesses
This final increase may pose concerns for small businesses and non-profit organizations operating in the state. To be prepared to comply with this change, all employers should do the following prior to June 1:
- Audit payroll records: First and foremost, businesses must have an awareness of the current payrate of all employees and know whether any immediate adjustments will be required to be compliant.
- Communicate with your employees: If you have employees affected by the increase, notify them as soon as possible. This will help to avoid any surprises or confusion.
- Analyze costs and pricing: The minimum wage increase will likely lead to higher costs for businesses. This may mean raising prices on goods and services, implementing cost-controlling measures, or a combination of both.
Minimizing Financial Impact Long Term
In addition to the immediate actions needed to comply with the increase, businesses should also consider additional tactics that will minimize the financial impact over the longer term. Here are three tactics to help decrease the financial impact of the minimum wage increase:
- Make continuous improvement to your business’s culture: Adopting a continuous improvement mindset helps organizations will help realize efficiencies in processes while increasing overall productivity.
- Invest in your employees: Providing employees with the means to build and develop the skills needed to meet organizational goals increases productivity as well as the value of the organization’s human capital.
- Focus on employee engagement: Implementing engagement initiatives that are meaningful to the employee population helps businesses in both qualitative and quantitative ways, including avoiding the costs related to employee turnover. Employee recognition programs, team activities, birthday celebrations are engagement activities that are fairly simple to implement and can go a long way. Engaged employees lead to increased productivity, higher customer satisfaction, and increased profitability.
ARI provides comprehensive accounting and human resources services, supporting our clients in addressing the immediate and long-term needs of small-to-mid-size businesses and can address questions related to the minimum wage increase. If you are looking for guidance in this area, contact ARI.
