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As always, to make sure your business is prepared and stays in compliance, we recommend that you discuss these upcoming changes to minimum wage laws in Mississippi with your accountant and lawyer. This article does not constitute legal advice.
Depending on where you live or work, the minimum wage can vary greatly—and it’s on the rise in most places.
If you’re a Mississippi small business owner, you may be wondering what’s next for the minimum wage in your state. We’ve got you covered on what’s happening next with the Mississippi minimum wage and what you need to do to be prepared.
What is the minimum wage in Mississippi?
The state of Mississippi doesn’t have a minimum wage, so the federal minimum wage governs what workers are paid unless you’re exempt from the minimum wage under federal law.The current federal minimum wage is $7.25 an hour. That equates to about $15,000 a year. The last time the Mississippi minimum wage increased was in 2009, when it increased by 70 cents.
There are a number of exemptions to the Mississippi minimum wage, including:
- Tipped employees who earn at least $30 in tips per month are permitted to be pay an hourly cash wage of $2.13
- Certain jobs, including farm workers, seasonal workers, newspaper deliverers, and “informal” workers (babysitters, etc)
- Workers under the age of 20 years old can be paid a minimum wage of $4.25 per hour for the first 90 days of employment
- Certain nonprofit and educational organizations may be eligible to pay workers 85% of the state mandated minimum wage
Will Mississippi’s minimum wage change in 2022?
Currently, there are no bills that look like they will be passed in 2022 for raising the minimum wage in Mississippi. However, the Magnolia State’s legislature is no stranger to bills aimed to create a new minimum wage in Mississippi.
The 2019 Mississippi Minimum Wage Act, or Senate Bill 2150, aimed to gradually increase the Mississippi minimum wage to $10 an hour by 2022, but this proposal died in committee. In 2021, Mississippi lawmakers continue to debate if and how the state should go about increasing the minimum wage. With Mississippi being the last state to not have a law requiring equal pay for women and men, there is still much discussion to be had.
Are there plans to change the minimum wage beyond 2022?
Even with multiple bills being proposed, like the 2020 Mississippi Minimum Wage Act, there are no formal plans to increase the minimum wage in Mississippi, so the state will default to the federal government’s plans.
Even though the federal minimum wage has been $7.25 since 2009, there has been plenty of discussion about raising the federal minimum wage to $15 an hour. The U.S. House of Representatives passed a bill in July 2019 to gradually increase the federal minimum wage to $15 an hour by 2025. While this motion did not pass through the Senate, it is still undetermined whether or not Mississippi will choose to increase the state mandated hourly pay beyond the federal minimum wage in the coming years.
How should small business owners prepare for changes to the minimum wage?
While there is no official Mississippi minimum wage increase date, it’s always good to be prepared in case of a sudden wage increase.
You’ll want to audit your business and determine if you are making any payroll mistakes. Then, think about how you could cut costs and save money for future wage hikes.
Investing in technology can help your business’s efficiency and save you money in labor costs. Automating your payroll is one option. Square’s payroll software can help you run both hourly and salaried employee payroll and comes with a plethora of payroll features to keep your business humming along. Plus, updating your tech doesn’t have to cost you a ton, as Square Payroll is designed with small business pricing in mind.
You’ll also want to focus on minimizing staff turnover, since training new staff can get expensive. Hiring the right people and successfully onboarding them is important. Also, think of ways to retrain your staff to ensure performance is high and staff members feel equipped with the skills to do their job.
To protect your business and pay your employees fairly, find an accountant who is familiar with your local laws and can help guide you on what’s required where your business and employees are. In the meantime, you can help your business stay compliant by posting a minimum wage poster that is accessible to all your employees and getting a free EIN.
Square is here to help you navigate the Mississippi minimum wage and inform you of COVID-19 resources for small businesses, along with other means to help your business thrive.