Even if you love your job, you probably wouldn’t clock in day in and day out if there wasn’t a paycheck involved. Let’s face it—pay matters.
Research from LinkedIn found that 70% of professionals want to hear about salary in the first message from a recruiter, and 59% of candidates said that salary was the leading factor that contributed to feeling fulfilled in their careers.
With all of the conversations around the skyrocketing cost of living and potentially increasing the minimum wage as a result, we can’t blame you if this question is rattling around in your brain: If you’re already above minimum wage, will your pay go up because minimum wage did?
It’s a totally justifiable question. We’re answering that (and even more burning questions about minimum wage) in this guide.
What is the current minimum wage?
The national minimum wage rate is established in the Fair Labor Standards Act (FLSA). Currently, the federal minimum wage for covered, nonexempt employees is $7.25 per hour. But, that doesn’t mean that all low-wage workers across the country earn that rate.
Many critics assert that $7.25 per hour is hardly a living wage, especially as the cost of living has continued to rise. So, with more and more people pushing for a higher hourly wage, many states (and even individual cities) have passed minimum wage increases.
For example, here’s a look at the current minimum wage in several different states:
- Arizona: $12.80 per hour
- California: $14 per hour for employers with 25 employees or less, $15 per hour for employers with 26 employees or more
- Maine: $12.75 per hour
- New York: $13.20 per hour, $15 per hour (Long Island, Westchester and NYC)
If you’re curious about the state minimum wage where you are, the Department of Labor has a helpful breakdown of state minimum wage laws.
Also, keep in mind that different minimum wage laws apply for tipped employees. The federal minimum wage for employees who collect tips is $2.13 per hour, provided that amount combined with tips received at least equals the current federal minimum wage.
Will there eventually be a higher minimum wage?
The conversation about raising the federal minimum wage isn’t a new one. In July of 2019, the United States House of Representatives voted 231 to 199 to raise the minimum wage to $15 per hour.
But, don’t get too excited quite yet—momentum has completely stalled since then, and that new minimum wage hasn’t been implemented. The bill has died in the Senate, and it was never even voted on. Lawmakers were hesitant, as the Congressional Budget Office claimed the increase could lead to job losses in the millions.
So, while the Raise the Wage Act garnered plenty of support, there are no firm plans currently in the works. However, minimum wage continues to be a topic of conversation, as cost of living continues to rise (the Bureau of Labor Statistics says it rose by 2.3% from 2018 to 2019). Additionally, nobody knows what could happen with future administrations in place.
If you’re already above minimum wage, will your pay go up because minimum wage did?
Here’s the short answer: not necessarily.
Raising the minimum wage means that business owners and employees in the United States are legally required to raise the hourly wage for their minimum wage workers—and only their minimum wage workers. If you’re already earning above minimum wage, your employer won’t be required to give you a pay increase too.
However, while it won’t be mandated, it’s likely that many companies would boost the pay rates for their other workers too. Here are a few reasons why:
- They’ll want to recognize different skill levels: Let’s say that you currently work in a somewhat skilled position at a pay rate of $15 per hour. You have a technical degree and several years of experience. If the minimum wage rate goes up to $15 per hour, that means you’ll be earning the same pay as the high school student who works part-time for your same company. Most employers recognize that this isn’t fair to you, and that different positions are worthy of different wage levels.
- They’ll want to maintain employee morale: Employers also recognize that these types of pay discrepancies can tank employee morale. Pay and benefits carry a huge amount of weight in employee satisfaction, and companies recognize that motivation, commitment, and enthusiasm will suffer if compensation becomes a pain point for employees.
- They’ll want to boost employee retention: When employees are happier, they stick around longer. In fact, research shows that a 10% increase in base salary equates to a 1.5 percent increase in the likelihood that a worker will stay with their current employer.
Despite the fact that a minimum wage increase would result in a trickle effect of higher labor costs across their entire company, a survey conducted by the National Employment Law Project found that a significant portion of employers were in favor of raising the federal minimum wage. In fact, 61% of small business owners supported a minimum wage hike.
Minimum wage matters for both sides of the equation
For wage earners, an increase in the federal minimum wage could be good news. It would mean that employee pay rates could better keep up with the ever-increasing cost of living, and the boost for low-wage workers would likely trickle through the business and positively impact other employees too.
It’s not all bad news for business owners either. While increasing pay across the board would mean substantially higher labor costs, they’d reap the benefits in terms of morale, engagement, and retention.
Benefits aside, there aren’t any firm plans in place to increase the minimum wage. Numerous states and cities have taken matters into their own hands, but there haven’t been any sort of changes in federal law quite yet.
So, for now, employers and employees alike can only sit back and watch as the conversation unfolds. In the meantime, this guide will help you figure out how to move forward if and when a federal minimum wage increase goes through.
1. Introducing Yourself
Your introductory email needs to pack a lot of information into a small package. Try something like this:
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Hello Jane,
My name is John Doe and I work for ABC Agency, where we provide business insurance policies to many of Dallas' rockstar small businesses.
Congratulations on your new business, Jane's Bakery. Are you wondering if you have all the insurance you need? Or if your policies will really cover you in a pinch?
At ABC Agency, we pride ourselves on providing robust, comprehensive coverage options to companies like yours with flexible, pay-as-you-go plans.
Are you available this week to talk more about how we can help? I can help you find the most affordable rates and the best policies out there.
I look forward to speaking with you soon.
Cheers,
John Doe
2. Presenting a Quote
Once you've met with your potential client, a quick reply with their quote will get the ball rolling.
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Hi Jane,
Thanks so much for meeting with me this morning. I loved touring Jane's Bakery–I can still smell those delicious chocolate chip cookies baking! You have a great location, and I'm sure you're going to do great on Front St.
After reviewing my notes, I've pulled together an insurance quote for you (attached). I recommend a business owner's policy. A BOP includes several insurance products in one: liability, property insurance, and business interruption insurance. It offers robust coverage at a competitive price.
I'll call you in a few days to see what you think about this insurance plan. In the meantime, if you have any questions, don't hesitate to email me or call me at [phone number].
Again, thank you for your time today. I look forward to working with you in the future.
Cheers,
John Doe
3. Thanks for Purchasing a Policy
Gratitude is important! It's never a bad idea to thank your clients for their business.
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Hi Jane,
Thank you for choosing a business owner's policy with ABC Agency. We know it's so important to get the right coverage for your business, and we are honoured you've placed your trust in us.
We're excited to work closely with you, and our no. 1 goal is to make sure you're business is always protected.
Do you have any questions? We are here to help. Reach out whenever something comes to mind.
Thank you again for choosing ABC Agency to insure Jane's Bakery.
Cheers,
John Doe
4. Welcome Email
A welcome email helps clients feel like you're there to help–and can softly pitch other insurance products you offer.
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Dear Jane,
Welcome to the ABC family! We are thrilled to have you as a new customer and can't wait to meet all of your insurance needs.
As an independent insurance agency, we work with multiple insurance providers to find the best coverage options for all our customers. If you need any other type of insurance–like [include additional offerings unique to your agency, like life insurance, health insurance, home insurance or anything else]–we can help you too.
Do you want to discuss any of these policies?
Cheers,
John Doe
5. Introducing a New Product
A happy client may want to expand their business with you.
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Hello Jane,
I hope all is well with you and Jane's Bakery. I stopped in yesterday for a blueberry muffin and coffee, and they were delicious. I loved the hint of cinnamon in the muffin! Was that your idea?
I wanted you to be the first to know we are now offering commercial vehicle insurance to our policyholders. Auto insurance for your catering vans is super important since your personal car insurance won't cover them.
We're offering this insurance coverage solely to our current business clients at the moment and have some very competitive rates.
Would you like me to work up a quote for you?
As always, thanks so much for being a part of the ABC family.
Cheers,
John Doe
6. Asking For Referrals
Once your relationship is established and comfortable, let your clients help you grow.
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Hi Jane,
You've been a valuable member of the ABC family for two years now, and we so appreciate your business–not to mention the muffins you supply for our monthly meetings!
Because you are a valued policyholder, I wanted to ask a quick favour. I know you are active in the local Chamber of Commerce, and I'm hoping you might know some colleagues who would benefit from working with our insurance company.
Referrals are one of the most effective ways to connect with our community since people really trust their friends, family and colleagues. Is there anyone you'd recommend I speak with?
Remember that in addition to business insurance products, we offer everything from life insurance policies to pet insurance.
As a thank you for your help, we will send you an Amazon gift card of $100 when your referrals buy insurance from us.
Thanks so much for your help!
Cheers,
John Doe
7. Policy Renewal
If your client needs to renew their policy with you, send an email like this:
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Hi Jane,
I hope you're doing well! What a year it's been—from being listed as one of the top 5 bakeries in Dallas to being an official vendor for the city—you have so much to be proud of.
Just a heads up that your business owner's policy is up for renewal soon and will expire on June 15, 2023.
If you're still happy with the coverage, we can easily renew it for you.
Do you have some time to chat this week?
Looking forward to serving you again!
Cheers,
John Doe