States and provinces alike are perceiving minimum wage increases that aim to benefit employees who are at the lower end of the wage scale. Seattle is already at $15/hr, with Minneapolis approving the $15/hr hike by 2024. Ontario is also expecting the minimum wage to increase to $14/hr in 2018 and $15/hr by 2019. Employees who are currently making minimum wage are ecstatic, but there’s one group we’ve forgotten about – what about the people who’re already making the newfound minimum wage? Someone who is already making $15/hr may not be too excited to hear that they’ll be the new bottom in a few short months. Let’s call this group the “Red Flags.” Employers should readily be thinking about how the minimum wage increase will affect these employees. Keep in mind these employees may be expecting their wages to increase in correlation with the new legislative standard. If they don’t and they’re static at the same level after the new changes have been implemented, Human Resources may have a disgruntled group of people on their hands.

An important part of every Human Resources department is employee relations – emphasizing the candidate and/or employee experience leads to satisfaction and retainment. In such a competitive environment, retaining top talent is crucial, so Human Resources should evoke that loyalty by pro-actively showing that they are on top of things that may detrimentally affect their employee’s financial or economical well-being. You don’t need to dramatically increase the wages of the “Red Flags” group but we certainly don’t want these red flags turning into white flags of surrender (or resignation) so it’s imperative to at least consider how you will be handling this pending issue. In Ontario, for example, the minimum wage is currently $11.60/hr as of October 2017. In January 2018, this will significantly increase to $14/hr. Someone who is making $14/hr may expect their wage to rise by at least $2.40 to maintain their economic level. If the company can afford this, then we would recommend doing this for the employee’s sake. You can argue that this doesn’t benefit the business, but neither does a resignation which will lead to further recruitment to find a replacement for the employee who  became frustrated with their compensation. It becomes problematic if the company is tight for money and these employees are, in fact, stuck at minimum wage. In this case, the company may need to look into alternative perks (such as improved medical benefits or gym/tuition reimbursements) that can possibly make up for the lack of compensation.

Either way, employers should take a pro-active approach to legislative wage increases because tackling this potential issue as soon as possible will ensure that problems don’t arise when the changes take place. After the new minimum wage increase, it may be too late to react.