Utah is one of the few states that have not passed a law to gradually raise the minimum wage. 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.
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What is the minimum wage in Utah?
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 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.
Executive employees. These are salaried employees who meet certain criteria, like earning at least $684 per week and hold management responsibilities.
Several occupations including farmworkers, seasonal workers, newspaper deliverers, and “informal” workers (babysitters, etc)
Nonprofit and educational organizations. These types of employers can choose to send an application to the Department of Labor to pay employees less than the state-mandated minimum wage.
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 September 2021 when the South Jordan Steward Health Care’s Western Region leadership team decided to pay Utah-based hospital employees $15 an hour. This is over double the Utah state minimum wage and federal minimum wage. Even so, the state of Utah has yet to pass a bill aimed to raise the state minimum wage to $15 within the decade. As proposals to increase the minimum wage in Utah continue to be considered at the state and local level, it is not yet certain when and how the Utah minimum wage will change in the future.
How should small business owners prepare for changes to the minimum wage?
Though there aren’t set plans for a Utah minimum wage increase, 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.