The minimum wage in Montana in 2023
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The Fair Labor Standards Act (FLSA) sets federal minimum wage standards that states must follow unless they have a higher state minimum wage law. Montana’s minimum wage law pays employees a rate of $9.20 per hour, which is higher than the federal rate of $7.25 per hour.
The minimum wage is the lowest amount of money per hour that an employer can legally pay its employees. This means Montana employers cannot pay workers less than this amount, regardless of their industry or type of business, and seasonal or part-time workers must also pay this rate.
Even if your employer breaks any of these rules, you are protected by law and any wages illegally withheld should be returned to you.
What is the current minimum wage in Montana?
The state of Montana is expected to raise the minimum wage from $9.20 to $9.95 per hour on January 1, 2023. This means employers will have to pay their employees more to compensate for their work from January this year. But it also means people currently earning minimum wage will be better off in January.
Why is a minimum wage needed?
The concept of the minimum wage was created to ensure fairness for workers. While employers will of course try to pay as little as possible to remain competitive, a minimum wage exists to prevent them from paying so little that it is impossible for workers to make ends meet.
Additionally, some jobs require skills that come with education and experience, which should be considered when determining pay. For example, someone who has worked in the service industry for several years may provide better customer service because of their expertise and knowledge of the company’s operations. Employers should reward people fairly for their hard work and education by paying them more than minimum wage.
What Are the Different Types of Pay Rates in Montana?
The minimum wage is the lowest hourly rate that an employer can legally pay an employee. The Fair Labor Standards Act (FLSA) sets a federal minimum wage that applies to all states. However, not all federal states have adopted the national minimum wage. The Montana Minimum Wage Act also includes provisions for different types of workers:
Standard Minimum Wage
The standard minimum wage is the minimum that an employee must pay per hour in a given state. This varies from state to state, but it is not uncommon for the federal and state governments to have different minimum wages. In Montana, as of January 1, 2023, the standard minimum wage is $9.95 per hour.
Under 20 minimum wage
If you are under 20 years old, your employer can pay you less than the legal minimum wage if you work at least 90 days per calendar year and no more than 30 hours per week. The minimum wage for under-20s in Montana is $4.25 an hour.
Minimum wage with tip
Montana law does not allow employers to count tips. Minimum wage applies to all employees in Montana, including tips such as waiters and waitresses. Employers are therefore not allowed to have tips offset against their minimum wage obligations.
Suppose the employee does not receive enough tips to make up the difference between the cash wages paid by their employer and the applicable minimum wage. In this case, the employer must make up the difference so that the employee earns at least the applicable minimum wage per hour.
Student Minimum Wage
Minimum wage for students is $7.82 per hour for up to 20 hours per week with certain employers. This exception applies only to students who are enrolled in an accredited secondary school or college and work part-time.
How should small business owners adapt to Montana minimum wage changes?
In the coming months, small business owners will work to determine how this change will affect their business.
To prepare for these changes, small business owners should do the following:
Determine your expenses
The first thing you need to do is figure out how much your employees are making now and how much they will be making when the new minimum wage goes into effect. Then think about what other expenses will also increase. For example, if you pay health insurance for your employees and their families, these costs also increase.
Automate your payroll system
This is something any small business can easily do: automate payroll so that it happens automatically every week or two, instead of having to manually pay each employee on payday. You can also find software programs that allow you to track employees’ hours worked and automatically calculate their paychecks based on those hours worked.
This is an easy way for a small business owner to make sure everyone gets paid what they’re owed without having to sit down with every employee every week or two and figure out exactly how much money they need from each paycheck.
Evaluate hiring practices
Once you know how much to pay your employees, you should assess whether or not your hiring practices need updating. If you’re looking to add new employees to your team, now is a good time to consider how they will fit into your company culture and job descriptions before you start working with you full-time.
It’s also important to evaluate current practices like overtime or whether employees are eligible for benefits. It should be fixed before these changes go into effect on January 1st, 2023.
As more states begin enacting minimum wage increases, business owners need to adjust their practices and ensure they meet state minimum wage requirements. While some see these changes as beneficial for businesses, others may find them problematic. In any case, every business owner should be aware of how federal, state, and local laws affect their business.