What You Need to Know About Utah’s Minimum Wage

This year, 24 states increased their minimum wage in 2020, but Utah’s will stay the same. Despite the fact that it’s not changing, as a small business owner, you need to know the current minimum wage regulations to make sure you’re compliant. Not only that, but considering the growing movement for minimum wage increases nationwide, it’s critical to stay on top of the latest developments so you can plan accordingly.

To make sure you’re in the know, here’s a rundown of need-to-know details on the minimum wage in Utah.

What is the minimum wage in Utah?

The minimum wage in Utah is $7.25, which is the same as the federal minimum wage. The state minimum wage last changed in 2008, when it was raised by $0.70 from $6.55 to $7.25.

Though the minimum wage applies to most Utah employees, there are some exceptions, including:

• Tipped employees. Utah labor law allows employers to take a tip credit employers to take a tip credit for employees who make more than $30 per month in tips. Employers can pay a lower minimum cash wage of $2.13 per hour, and up to $5.12 in tips earned per hour can be deducted from employee wages as a “tip credit” for employers. With the maximum tip credit taken, these employees must be paid a cash wage of at least $2.13 per hour, so their total compensation is at least $7.25 per hour.

• Minors. For employees under the age of 20, Utah allows a training minimum wage of $4.25 per hour for their first 90 days of employment.

• High school and college students who work part-time can be paid 85 percent of the minimum wage for up to 20 hours of work per week at certain employers (such as work-study programs at universities).

• Employees considered exempt under the Fair Labor Standards Act (FLSA).

• Overtime pay The Utah overtime minimum wage is $10.88 per hour for those who work over 40 hours per week, which is 1.5 the regular rate.

• Executve employees These are salaried employees who meet certain criteria, like earning at least $684 per week and hold management responsibilities.

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.

Will the Utah minimum wage change?

There’s currently no plan to increase the minimum wage. However, considering Amazon is now a major employer in Salt Lake City, there may be mounting pressure for other employers to raise their minimum wage, as Amazon’s minimum wage is $15 per hour.

The most recent signs of change came in 2018 when state lawmakers proposed a bill for a Utah minimum wage increase to $12 per hour. Though it failed, considering the pressure of wage increases across the country and the competition from Amazon, it’s possible a bill to raise the Utah minimum wage will be proposed again. But the state minimum wage growth for Utah will continue to match the federal rate unless otherwise legislated.

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

Though there aren’t set plans for a Utah minimum wage increas, it’s wise to make sure your business is ready when the time comes. We recommend taking the steps below:

• Evaluate your staffing plan: Review your monthly sales and overhead costs to see if your staffing levels are reasonable. Determine if you can adjust your staffing plan to be more cost-effective. For example, if you have a seasonal business, it may make sense to hire contract employees during your busy season and operate with fewer full-time employees year-round.

• Hire the right people: The hiring process is time-consuming and expensive. On top of that, it’s a distraction from your day-to-day operations. You can avoid losing valuable time and money by finding the right employees the first time around. Once you find the right people, make employee retention a priority and take steps to prevent turnover.

• Upgrade your technology: Consider automating time-consuming tasks like payroll to save time and money. Square payroll software saves time and effort. Automatic payroll helps you stay on deadline and never pay your employees late. Avoiding payroll mistakes keeps your employees happy and your business running smoothly. You can set custom payroll features with technology that fits even small business pricing.

Changes beyond the minimum wage may affect your bottom line as well. The pandemic, for instance, is changing how business owners operate. Square offers helpful Covid-19 small business resources to help you navigate new practices.