There has been a lot of news recently about the Federal and various State Governments increasing the minimum wage to between $8.50 to $10.10. What I rarely hear discussed is that this increase will also raise employers (total payroll tax burden) and workers compensation rates; since workers compensation is based on the hourly wage paid.
For example the increased minimum wage will increase workers compensation costs through higher indemnity payments. This is another reason your workers compensation rates WILL continue to increase over the next few years.
So what can a staffing owner do?
Make the discussion of increasing labor costs a regular topic with clients. I have found that staffing owners that rarely discuss how their labor cost inputs are increasing ( with their clients,) are usually the ones that find themselves with their backs against the financial wall much of the time.
The bottom Line— Maintaining adequate gross profits will be a moving target for the foreseeable future.
Please let me know how you feel about this topic? I really enjoy hearing from you about all staffing company issues.
And when you need to look for a new workers compensation solution please contact me at davidstaffing@gmail.com and visit our web site at www.StaffingCompSolutions.com
All the best
David Schek
President
StaffingCompSolutions.com
American Staffing Association Member
California Staffing Association Member
Exclusive PEO Broker for the United States Staffing Association