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Nothing in this article constitutes legal advice. Please consult a tax attorney or tax professional if you have questions about minimum wage compliance.
Across the country, multiple states have raised their minimum wage requirements in recent years. While the North Dakota minimum wage has stayed the same, it’s important to make sure you’re up to speed on the state requirements if you’re a small business owner.
Here’s a roundup of must-know details on the minimum wage in North Dakota.
What is the minimum wage in North Dakota?
- Tipped employees: Employers must pay tipped employees a cash minimum of $4.86 per hour. Up to $5.12 in tips earned per hour can be deducted from employee wages as a “tip credit” for employers. However, tipped employees’ total compensation must equal at least $7.25 per hour (including tips).
- Full-time and vocational students: Provided employers have a license from the North Dakota Department of Labor, they can pay students 85% of the minimum wage.
- Minors: Under the “Youth Minimum Wage Program,” employers can pay workers under the age of 20 a minimum wage of $4.25 per hour for their first 90 days of employment.
- Employees considered exempt under the Fair Labor Standards Act (FLSA).
Since some counties, cities, and towns may have their own minimum wage laws, make sure you confirm which local wage laws apply to you.
Are there plans to change the minimum wage beyond 2023?
There are no current plans for a North Dakota minimum wage increase. However, measures aimed to gradually increase the minimum wage to $15.00 are increasingly being considered by the North Dakota state government. In January 2021, state lawmakers introduced a bill to raise the minimum wage to $9.00 in 2022 and annually increase the state mandated hourly pay until reaching $15.00 in 2027. This bill eventually died in the House, leaving uncertainty as to how the North Dakota minimum wage will change in the future.
How should small business owners prepare for changes to the minimum wage?
Though there are no plans for a North Dakota minimum wage increase in the immediate future, it’s better to be prepared for when the time comes. To ensure your business is ready, we recommend taking the following steps:
- Reevaluate your budget: Review your monthly revenue and expenses to see if your staffing levels are appropriate. Based on your cash flow, determine if you need to adjust your staffing plan.
- Use hiring best practices: Save valuable time and money by using hiring best practices. If you ask the right questions and thoroughly vet candidates, you have a better chance of finding the right employees the first time around. Once you find the right people, focus on retaining valuable employees with effective retention strategies.
- Upgrade your technology: If you automate time-consuming tasks like payroll, you can save time, which allows you to focus more energy on growing your business. Square Payroll makes it easy to learn how to do payroll yourself and to avoid common payroll mistakes.
While these are helpful guidelines to follow, to make sure your business is prepared and stays in compliance, you should discuss North Dakota minimum wage laws with your accountant and lawyer.