A Primer On Missouri Minimum Wage Increases
Small-business owners across the country are adapting to the new minimum wage laws. If you’re an employer in Missouri, it’s important to stay up to date on minimum wage laws to ensure the financial health of your business. We’re here to help with our guide.
What is the minimum wage in Missouri?
Missouri’s minimum wage is $7.85 an hour, slightly higher than the federal minimum wage. The last time the minimum wage increased in Missouri was 2013, when it increased by $0.50.
In 2015, St. Louis mandated a minimum wage increase to $10 an hour. However, in 2017, the legislature dropped the minimum wage to $7.70. It now matches the state minimum wage of $7.85.
Some employees who are exempt from this minimum wage rate include:
- Tipped employees, who must be paid at least $3.925—half of the current minimum wage.
- Any business doing gross annual sales or business of less than $500,000 are allowed to pay employees less than the federal minimum wage.
- Most agricultural and farm employees are exempt from the minimum wage.
Keep in mind that counties, cities, and towns may have their own minimum wage laws. Be sure to check what local wage laws may apply to you.
Get Started with Square Payroll
Payroll processing trusted by thousands.Get Started
Are there plans to change the minimum wage?
In recent years, there have been some attempts in the state legislature to raise the minimum wage to $10.
In November 2018, voters will vote on Proposition B, which would increase the statewide minimum wage to $12.
What’s happening beyond 2018?
Depending on the outcome of Proposition B, minimum wage may increase in the near future. Minimum wage may also increase or decrease in accordance with the cost of living.
How should small-business owners prepare for potential changes to the minimum wage?
Even if changes to the minimum wage aren’t immediately on the horizon, it doesn’t mean you shouldn’t prepare in case they ever are. Here are a few options you may want to consider:
- Audit your expenses: Check your cash flow in detail and create a hiring plan that you can afford. Since Missouri’s future minimum wage can be unpredictable, it’s best to plan ahead. In some cases, you may find that hiring temporary workers as needed is less expensive than taking on full-time regular staff.
- Make sure you hire and keep the right employees: Replacing an employee can cost a lot. You can decrease the total cost associated with recruiting and training when you hire (and then retain) the right people to do the job. Look for candidates with good track records, who come recommended, and who fit in with the company culture.
- Update tech: Consider automating certain aspects of the work (like payroll), and find ways to reduce production costs so you can better prepare if wages need to increase.
As always, to make sure your business is prepared and stays in compliance, you should discuss Missouri’s minimum wage laws with your accountant and lawyer.
Understanding the Federal Minimum Wage
How to Do Payroll Taxes and Process Payroll Yourself
The Most Common Payroll Mistakes and How to Avoid Them