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What You Need to Know About Oklahoma’s Minimum Wage

Nothing in this article constitutes legal advice. Please consult a tax attorney or tax professional if you have questions about minimum wage compliance.
Tiffany Walden, Writer

There’s a lot of discussion about minimum wage in Oklahoma this year. As a business owner, you should stay on top of the topic. Not only is it important to stay compliant with the Fair Labor Standards Act (FLSA), but also staying up to date with any Oklahoma minimum wage changes helps you plan your business’s future accordingly.

We’ve created a guide, just for you, to get a better understanding of what’s happening with the Oklahoma state minimum wage.

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What is the minimum wage in Oklahoma?

At this time, the Oklahoma minimum wage is $7.25 per hour, which is the same as the federal minimum wage rate. Oklahoma hasn’t seen an increase in its minimum wage since 2008. That year, the rate went from $6.55 to $7.25, an increase of $0.70.

However, there are some Oklahoma minimum wageexemptions:

  • Oklahoma tipped minimum wage is $3.63 per hour. Employers are allowed to take a tip credit of up to 50 percent. This means that employers can pay as little as $3.63 per hour as long as the employees earn enough tips to bring their total hourly wage up to the state’s minimum. This requirement also comes into effect in businesses that practice tip pooling.
  • Employees under the age of 20 can be paid $4.25 per hour for the first 90 days.
  • Part-time employees who are full-time high school or college students may be paid $6.16 per hour for certain jobs.
  • There is also an exception for employees who are considered exempt under the Fair Labor Standards Act (FLSA).
  • Lastly, federal contractor employees must be paid a minimum wage of $10.80 per hour.

What is the Oklahoma City minimum wage

The minimum wage in Oklahoma City follows the same regulations as the Oklahoma minimum wage.

Will the minimum wage change in 2020?

There are no plans to change the minimum wage rate in Oklahoma this year.

In 2019, though, there was a conversation about increasing the minimum wage rate in Oklahoma for 2020. A new state Senate bill was introduced in early 2019 that called for the rate to jump from $7.25 per hour to $10.50 per hour.

The bill was written by Sen. George Young, a former Oklahoma House representative who was elected to his Senate office in November 2018. In Senate Bill 102 Young writes, “employers of this state shall pay employees a wage not less than Ten Dollars and fifty cents ($10.50) an hour or the current federal minimum wage, whichever is greater, for all hours worked.”

However, neither Senate Bill (SB) 102 nor another bill that would have raised Oklahoma’s minimum wage (SB 788) was heard by the Senate Business, Commerce, and Tourism Committee, which means there will be no minimum wage increase in Oklahoma for 2020.

Are there plans to change the minimum wage beyond 2020?

Oklahoma uses the Consumer Price Index to evaluate inflation rates and whether the state’s minimum wage should increase or stay the same. This evaluation is supposed to occur every year. The state hasn’t changed its minimum wage rate since 2008.

In January 2020, Sen. George Young filed Senate Bill 1165, which would try again to raise Oklahoma’s minimum wage to $10.50 per hour or match the federal minimum wage, whichever is greater. As of now, the bill for a minimum wage increase in Oklahoma is still in discussions.

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

Make sure you’re prepared as an employer if the minimum wage in Oklahoma increases. Here are some tips to help you prepare for a change in Oklahoma’s minimum wage.

Audit your expenses: The best way to prepare for a state increase in minimum wage rates is to take a full look at your business expenses. Is there any given area where you can cut expenses?

Make the right hires: The cost of replacing employees can be significant, especially for a small business. You decrease the total cost associated with recruiting and training when you hire the right employees. Look for candidates with good track records, who come recommended, and who fit in with your company’s culture. Once they’re onboarded, make sure you build a relationship and provide paths for growth, ensuring you are keeping valuable employees.

Increase prices: Maybe you need to bring in more cash flow to keep up with the increasing wages of your employees. Take a look at the price trends for the products you’re selling, and determine whether you can reasonably raise prices. Remember, you don’t want to disappoint your customers with an unreasonable price hike.

Update your technology: Having new technology can help you save time and money, especially when you choose technology that is priced for small businesses. You can learn how to do payroll yourself, and save on hiring for that position. Square Payroll for small businesses has a ton of payroll features that allow you to get some time back and focus more on running your business than on doing paperwork.

Whether it is keeping up with Oklahoma minimum wage or making sure that you get an EIN, Square is here to help you not only improve but also grow your small business.

Tiffany Walden is a contributor at Square where she covers everything from the importance of mentorship for minority entrepreneurs to how business owners can use technology to combat challenges within their respective industries.