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LABOR COST FACTORS IN U.S. FOODSERVICE—MINIMUM WAGE LEGISLATION

LABOR COST FACTORS IN U.S. FOODSERVICE—MINIMUM WAGE LEGISLATION

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Last Published: 06/20/2017

LABOR COST FACTORS IN U.S. FOODSERVICE—MINIMUM WAGE LEGISLATION

The Fair Labor Standards Act (FLSA) is a federal law that establishes minimum wage, overtime pay, record keeping, and child labor standards for private and public employers in the United States. 

 

While many states have their own minimum wage requirements, FLSA will usually overrule them. However, some states have a higher minimum wage rate. When the state minimum wage rate is higher than the federal rate, employers are required to pay workers the higher amount.

FLSA currently requires employers to pay nonexempt workers a minimum wage of $7.25 per hour, but nonexempt hourly workers in states with a higher minimum wage are entitled to the higher wage rate as stated in their state laws. The minimum wage will be increased in Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Hawaii, Maine, Massachusetts, Michigan, Missouri, Montana, New Jersey, New York, Ohio, South Dakota, Vermont, and Washington to start 2017. Oregon, Washington, D.C., and Maryland will see wage increases in their states later this year. Furthermore, local city ordinances have raised the minimum wage as high as $15 in places such as Los Angeles and San Francisco.

The #Fightfor15 movement, a minimum wage increase advocate, has published a recent study that contends that 44% of those surveyed are in support of raising the minimum wage to $15. It should be noted that age seems to be a deciding factor in the survey responses, with 68% of adults aged between 25-34 approving of the wage increase, while 54% of consumers aged 55+ say “no.”

LABOR COST FACTORS IN U.S. FOODSERVICE—HEALTHCARE REFORM

Another major cost factor is the Patient Protection and Affordable Care Act (PPACA). Often referred as the Affordable Care Act (ACA) and nicknamed Obamacare. Since the enactment of the ACA in March 2011 and the law’s employer mandate, restaurants have spent administrative hours managing and delivering these benefits. Compliance issues, such as restructuring employee hours and manager salaries, requiring businesses to cover all 10 essential health benefits, and the complicated employee reporting structures, increase the cost of employer-provided health insurance.

 

Entegra Procurement Services regularly publishes blog posts on food trends and innovations in food services. Entegra is more than a group purchasing organization (GPO): Our team of procurement specialists implement strategic sourcing to bring the most value to your business. We help our clients, in 

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