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What You Need to Know About Kentucky’s Minimum Wage

As always, to make sure your business is prepared and stays in compliance, we recommend that you discuss Kentucky minimum wage laws with your accountant and lawyer. This article does not constitute legal advice.
Meredith Galante, Writer

The federal minimum wage has remained unchanged for many years, and while some states are taking it into their own hands to pay workers a higher wage, many choose to follow the federal guidelines. For small business owners in the state, it’s important to stay in touch with what’s happening with Kentucky minimum wage laws. Here’s what you need to know about the Kentucky state minimum wage.

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What is the minimum wage in Kentucky?

The minimum wage in Kentucky matches the federal minimum wage of $7.25. Federal law says whichever wage is higher, federal or state, will be paid to workers. Some workers are exempt from being paid the minimum wage, including tipped workers, students in high school and college, and certain disabled workers, if they have a certificate from the Kentucky Department of Labor.

Will the Kentucky minimum wage change?

The minimum wage is currently not slated to change in 2019. However, Kentucky State Senator Reginald Thomas (D) pre-filed a bill in November 2018 that lays out a plan that would raise the state minimum wage to $15 an hour. This is the second time the senator has proposed a bill like this.

Are there plans to change Kentucky’s minimum wage beyond 2019?

Regarding Kentucky minimum wage, 2020 did not see an increase. And the minimum wage in Kentucky is currently not slated to change. However, some lawmakers have been pushing for new plans that would lead to a Kentucky minimum wage increase to $15 an hour. Proposed plans have suggested increasing the minimum wage in Kentucky incrementally each year to reach $15 per hour by 2027.

Also note that counties, cities, and towns may have their own minimum wage laws. Be sure to check which local wage laws apply to you, such as the Louisville, Kentucky minimum wage standards.

How should small business owners prepare for changes to the minimum wage?

While there are no official plans for a Kentucky minimum wage increase, it is wise to be prepared for the future to ensure the financial health of your business.

Start by hiring a good accountant. An accountant can help you adhere to any federal and state laws to ensure your business remains in good standing and is following Kentucky minimum wage laws. Then do a cost analysis to find ways to save, so if you do have to start paying your employees more, you’re prepared.

If you’re new to business ownership, set yourself up for a smooth payroll process with some important steps:

Next, invest in your team. One of the best ways to minimize costs is to minimize turnover in your staff. The cost of replacing employees can be significant, so hiring the right people and successfully onboarding them is important. You should 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.

If you do have the money, preempt any future changes to the Kentucky minimum wage by giving your staff regular raises. Providing a living wage helps with employee retention.

Meredith is a freelancer writer based in New York City. She’s been writing for Square since 2017 where she’s covered everything from the best software for restaurants to use to maximize profit, minimum wage laws across the country, and tips for entrepreneurs to maximize their impact.