Handling all the facets of the Fair Labor Standard Act (FLSA)and staying in compliance can be quite a chore. This is especiallytrue when companies are faced with staying current on minimum wagechanges and all the rules that surround them, including wagegarnishment and record-keeping requirements.

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Although the federal minimum wage has been stagnant since July2009, there has been a lot of movement to increase minimum wages atstate and local levels. Some 29 states plus the District ofColumbia have implemented minimum wage increases taking effect thisyear, and at least 21 localities in California alone haveestablished their own minimum wage rates.

This is not new — the Department of Labor’s Fair Labor StandardsAct has been around since 1938 and was intended to guaranteeminimum wage levels and to limit the number of hours employees canwork in a workweek without additional compensation. It alsoincludes record-keeping requirements and prohibitions on childlabor, and later amendments added requirements around equal pay forequal work.

The reason that minimum wage increases are a controversialtopic: Some argue adjusting the minimum wage can affect the priceof goods and services, current and future levels of employment,economic growth, income inequality and poverty. While sporadicincreases have occurred since the 1970s, the federal minimum wagerate has held steady at $7.25 per hour for the past sevenyears.

When you consider the minimum wage versus inflation, the current federalminimum wage would need to be more than $8 per hour to equal itsbuying power of the early 1980s and nearly $11 per hour to equalits buying power of the late 1960s.

In the absence of a federal increase, it is anticipated thatstates and localities will continue to act on their own, and thatcreates challenges for employers that have employees working inmultiple jurisdictions.

Employers are subject to federal, state and local minimum wagelaws and likely will need to pay employees the highest applicablerate of the three. That means, in addition to constantly monitoringfor state and local wage changes to ensure compliance, CFOs alsoneed to consider alternatives to offset labor costs as minimumwages rise.

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According to a Duke University and CFO Global Business Outlooksurvey, if the national minimum wage was increased to $10 per hour,20 percent of minimum-wage-paying firms would lay off workers, 44percent would slow hiring, 20 percent would reduce employeebenefits and 43 percent would raise prices. The same survey foundif the national wage were to rise to $15 per hour, 75 percent ofcompanies would consider reducing employment in the future.

Here are a few things your company should consider whennavigating the complex minimum-wage landscape.

• Constantly monitor for changes. Employers needto keep up with changes at the local and state level, paying closeattention to when they take effect and which employees they applyto. It’s best to keep an eye on various information sourcesincluding news outlets, relevant websites and updates from lawfirms, HR solution providers, and professional associations such asthe American Payroll Association.

• Communicate changes and update processes. Onceyou’re aware of changes going into effect, consider how they’llimpact your workforce and employee morale. If some employees arereceiving increases and others are not, tell your employees thatthe changes are due to the law and not to employeeperformance. Further, be sure managers and employees are notified;particularly in jurisdictions where required pay notices need to beupdated and provided to employees to ensure compliance. Next,update your systems and processes to make sure the new wage rategets paid accurately.

• Pay attention to record-keeping and reporting.Under the FLSA, each employer must keep certain records for eachemployee. While generally there is no required form, records mustinclude accurate information about each employee and data aboutspecific hours worked and wages earned. The specific wage dataneeded includes the basis on which employee wages are paid, theregular hourly pay rate, total daily or weekly straight-timeearnings, total overtime earnings for the work week, additions toor deductions from wages, total wages paid each pay period and dateof payment along with the pay period covered. Remember thatadditional requirements may apply under individual state and locallaws.

• Consider the difference in rates for federalcontractors. One area where the federal minimum wage hasincreased recently relates to federal contractors. Their wages canbe raised using an executive order in lieu of a bill being sentthrough Congress and then signed by the president. Several yearsago, President Obama signed an executive order that requiresparties who contract with the federal government to pay workersperforming work on or in connection with covered federal contractsa minimum wage higher than that of the general federal minimum wagerate. As of January 1, 2017, that rate is $10.20 per hour.Keep in mind that the executive order doesn’t apply to certaintypes of contracts, such as those for services, and some state orlocal laws may provide greater worker protections.

• Don’t forget state overtime-exemptionthresholds. Some states and cities, including New YorkCity and California, have separate overtime exemption thresholdsthat apply in addition to the FLSA. For example, in California,computer software employees must be paid $41.85 to $42.35 per hourand licensed physicians and surgeons must be paid $76.24 to $77.15per hour. If they don’t make those amounts, they’re entitled toovertime for any time worked over eight hours.

• Know what minimum wage is pertinent to wage garnishmentin your state. The federal Consumer Credit Protection Act(CCPA) sets the maximum amount that may be garnished for creditorgarnishments in any workweek or pay period, regardless of thenumber of garnishment orders received by the employer. Instates that adopt the CCPA standard for creditor garnishments(i.e., those not for support, bankruptcy, or any state or federaltax), the weekly amount garnished may not exceed the lesser of twofigures: 25 percent of the employee's disposable earnings, or theamount by which an employee's disposable earnings are greater than30 times the federal minimum wage (currently $7.25 an hour).

Some states regulate the limitations on creditor garnishmentwithholding based on the higher of the state or federal minimumwage. For example, Maine limits the amount subject togarnishment to the lesser of 25 percent of the individuals’disposable earnings for the week or the amount by which theindividual’s disposable earnings for the week exceed 40 times thefederal minimum wage or 40 times the state minimum wage, whicheveris higher.

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With the enactment of Senate Bill 501, effective July 1, 2016,California brought the local minimum wage into play regardingcreditor garnishments by stipulating that the maximum withholdinglimit is set at the lesser of: (a) 25 percent of disposableearnings, or (b) 50 percent of the amount by which the individual’sdisposable earnings for that week exceed 40 times the state (orlocal, if higher) minimum hourly wage.

• Consider minimum wages for tipped employees.Under the FLSA, tipped employees can be paid a minimum cash wage ofno less than $2.13 per hour if the employee receives enough in tipsto bring earnings up to the federal minimum wage. But again,employers must also consider state law. Some states require alarger cash wage than federal requirements. For example, in NewYork the rate is $7.50 per hour and in Massachusetts it’s $3.75 perhour. Certain states such as California and Oregon, prohibit tipcredits, meaning employees in those states must be paid theapplicable minimum wage in addition to tips.

Recently there has been movement in more than 20 states toprohibit cities and counties from implementing minimum wages thatare different than the state minimum wage.

Some of these restrictions result from legislation and othersfrom court decisions. However, until there is action on the federallevel, many states and localities will continue to adjust theirminimum wage rates, creating administrative and compliancecomplexities for employers.

Remember non-compliance with wage and hour laws can be costly.In 2016, the federal Department of Labor brought 10,722 minimum wage violation cases resulting innearly $35 million paid in back wages, and these figures do notinclude the thousands of wage and hour lawsuits brought by privateplaintiffs.

To avoid penalties and stay in compliance, closely monitor theshifting landscape so you’re not hit with any unexpected curveballsthat could impact your bottom line.