Important Payroll/Wage Changes to Look Out For in 2022
Updated: Feb 24, 2022
A new year means new change, and many of them affect you more than you know. Many people wonder if there will be wage changes and if so, what those changes will mean for them. Luckily, minimum wages are increasing across the country this year. One of the largest increases in United States history of the minimum wage policy went into effect earlier this month. While the wages vary from state to state, most of the states increased their minimum wage by a few dollars.
The previous federal wage was $7.25 and has not changed for over a decade; until now. While all states aren’t simultaneously changing their wages, a few states will be raising their minimum wages based on their consumer price index. Other states will raise their wages by specific dollar amounts, authorized under state legislation.
What Could This Mean?
Increasing minimum wage can affect employment because it would essentially increase costs of paying workers making low wage. In certain situations, employment could potentially increase, but in most cases, companies will hire less workers than they normally would under low minimum wages.
Increasing minimum wage can also influence family income. If families have workers that make minimum wage, this will raise their families’ income. This can also positively affect families by bringing them out of poverty due to the lower minimum wages prior to the raise. However, this could also negatively affect some families because many individuals can potentially be unemployed because of higher costs of labor that business owners would have to pay.
Increasing minimum wage could also mean a significant difference in worker productivity. When workers are paid a wage, they believe is fair and worth working for, employee determination and work ethic tends to increase. When workers are paid fair amounts that tend to reflect the labor they produce, their health (physical and mental) tends to lead to better performance levels. This also means fewer turnover rates in companies because employees want to continue working.
Many states are undergoing wage increases and this could affect workers in many ways. While we’ve considered the possibilities of what this could mean, it ultimately varies from state to state. Some of the effects are negative, but more of them tend to be positive. All in all, it’s safe to say that 2022 is the year of surprise.