A Guide to the Minimum Wage in South Carolina
As a small business owner, you need to be in the know. You need to know how your own business is running, of course. But you also need to be aware of rules and laws that affect your business — and how new legislation may change that.
One law discussed frequently, nationwide, is the minimum wage. So we’ve put together a quick guide of what you should know about the minimum wage if you do business in the Palmetto State.
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What is the minimum wage in South Carolina?
The minimum wage rate in South Carolina is the same as the federal minimum wage, which is currently $7.25 per hour.
There are some additional minimum wage rules that apply to specific types of employees:
- Employers with tipped employees can take a tip credit of up to $5.12. This means that tipped employees may be paid a minimum cash wage of $2.13 per hour, as long as their tips ensure that they still make at least $7.25 per hour. This is the same as the federal rule for tip credits. (Unlike federal law, South Carolina law does not specify a minimum amount of tips an employee must receive to be considered a “tipped employee.”)
- Full-time students may be paid no less than 85 percent of the minimum wage (or $6.16) for up to 20 hours of work per week at certain employers, such as work-study programs.
- Workers under the age of 20 can be paid a training wage of $4.25 during their first 90 days of employment.
Keep in mind that some counties, cities, and towns may have their own minimum wage laws. Be sure to check what local wage laws may apply to you.
Are there plans to change the minimum wage?
Currently there are no plans to increase the minimum wage in South Carolina. The minimum wage last changed in 2008, when it was raised $0.70 (both federally and in South Carolina) from $6.55 to $7.25. The state is one of 19 with the same minimum wage as the federal rate.
While it’s likely the minimum wage will remain at $7.25 until the federal minimum wage is increased, there are proponents of instituting a state rate separate from the federal rate.
In 2016, a state senate bill proposed raising the minimum wage to $15 by 2020 and would have required automatic increases beyond that tied to inflation. It was overturned in a subcommittee.
How should small business owners prepare for potential changes to the minimum wage?
Just because there’s no plan to change the minimum wage in South Carolina, it doesn’t mean that you shouldn’t keep the possibility in the back of your mind. You should always be prepared for any kind of changes that could affect your expenses. Here are a few tips:
- Look at your books: You need to have a full view of your business before you can make plans for the future. That means reviewing sales and looking at cash flow. Once you have a grasp of the state of your business, you can create a plan for management or growth, which may include hiring. Have sales increased to the point where you need more full-time help? Or do your sales increase at certain times of the year, in which case seasonal workers might be a better move?
- Make sure you hire and keep the right employees: Replacing an employee can cost a lot in time and money. 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 who have good track records, come recommended, and fit in with the company culture. Once the employee is onboarded, make sure you build a relationship and provide paths for employee growth; it makes it more likely that they will stay in their role.
- Update your tech: Technology can help you save time and money. Consider automating certain aspects of the work (like payroll) to cut costs. Imagine spending several minutes a week running payroll instead of hours (or instead of hiring someone to do it).
While these are helpful guidelines to follow, to make sure your business is prepared and stays in compliance, you should discuss South Carolina’s minimum wage laws with your accountant and lawyer.
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