Business Owner's Guide to Handle Minimum Wage Increase

If you haven't already made the adjustment, businesses in California can expect to spend more on minimum wage employees because of the increase of the minimum wage to $15 per hour by 2022. Here is a quick guide to help your California business handle the minimum wage increase. 

The latest deal to increase minimum wage in California means that wages will rise to $10.50 by next year, $11 in 2018 with an increase of $1 per year every year until the $15 minimum is reached in 2022. Businesses with less than 25 employees will be given extra year to raise their wages. However, as the minimum wage changes continue you will need to prepare your business to deal with the changes.  

Make Sure That Your Accounting Methods Are In Order 

As the minimum wage increases take effect, it is a good idea to ensure that any accounting software that you use for your business is up to date. This ensures that the wage and payroll tax payments for your employees are always made at the proper rates. In addition, it can reduce your chances of an audit from local and state tax agencies due to a failure to follow the proper payroll rates. 

Consider Employees’ Current Compensation 

If you have employees that are currently working at the $15 per hour rate, you can expect that they will want a raise to make up for the fact that $15 is now the minimum starting rate for your company. You’ll need to make sure that you discuss these changes with your CFO or your accountant to ensure that your business can take on the additional wage increases. You might want to also prepare for changes in your staff if the costs of keeping some employees with your business are not in line with your current operating expenses. 

Service Changes 

If you are trying to figure out how to best manage your expenses without making changes to your staff, you may also want to consider making changes to your service offerings. Finding ways to cut the costs of goods sold or making your service offerings less robust can free up some capital to cover the wage increases. 


One way that companies are handling the wage increases is by outsourcing more of their jobs to outside companies. Cutting some of the services that you previously handled in-house will not only make your business more efficient, it can also lower the costs of payroll for your company. Some services to consider outsourcing include cleaning, legal services, web design, accounting, tax preparation, data entry, and more. 

Using an outside cleaning service can help you to keep your payroll expenses at a minimum. If you are looking for a cleaning service to perform regular maintenance tasks for your business, Customized Custodial Services can help. Call today us at (800) 834­-1286 to request or email your free quote for office cleaning services.