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Managing a Minimum Wage Workforce

Posted on: October 30th, 2014

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Minimum Wage Workforce

Industries such as restaurants and retail stores usually operate with some part time workers that earn minimum wage. These businesses are closely looking at their state and local elections, which often override the federal minimum wage.

Facing increased labor costs, it’s even more important for these employers to hire the best people.  Improved hiring decisions translate to lower turnover and higher customer satisfaction levels, enabling continued success for their businesses.

Business Strategies For Managing a Minimum Wage Workforce

Hiring and managing a minimum wage workforce has its own challenges and is quite different from hiring practices in other industries. Typically, applicant volume is higher, language barriers can be an issue, and there is often a lack of experience (first time job). This segment also has a higher likelihood of prior criminal activity.

These employers need to exercise greater caution towards who they hire and how they are managed.  It is important for employers in these situations to protect their business, stay in compliance with the law and reduce exposure to lawsuits from disgruntled employees.

At a minimum, consider using these strategies and business processes:

1. Use behavioral interviewing techniques when interviewing

Take a look at how you interview applicants. Are you just confirming information that could be done with a simple background check? Instead, consider changing the questions you ask. Present a real world example and ask how the applicant would handle it. Using this interviewing technique can often predict how a candidate will handle stressful situations and could be a real eye opener for you and them.

2. Implement consistency in interviewing

You might have a high number of applicants vying for a single position.  You may also have multiple people interviewing a pool of candidates. This scenario makes it tough to evaluate candidates equally. Having a list of standard interview questions (including the behavioral interviewing example from above) will help with the selection process and give you an equal set of responses to compare.

3. Perform background checks

A good defense is a great offense. Even though employee turnover is high, the cost of background checks is minimal. Taking this extra step to check for prior criminal activity and/or financial problems could save you many headaches down the road. You might also consider doing this for current staff too. Be sure to consult with a professional familiar with federal, state and local laws before running any checks.

4. Provide an employee handbook

A growing trend in these industries is “labor on demand”. That is, work schedules can fluctuate dramatically, and employees are essentially on call as the business dictates. Today, it’s not uncommon for employee to be sent home during a slow period, only to be called back for a rush a short time later.

While this may be a necessity for your business, it’s very important that your employee handbook reflects policies that clearly address fluctuations in hours and scheduling, and how that will effect pay and benefits eligibility to ensure that the proper expectations are defined and understood by employees.

The handbook should also spell out your expectations regarding employee conduct, dress code, break rules, reporting their tips, using the time clock, calling in sick, tardiness and other rules.

Note that rules must be consistently and equally applied to employees. This is often an employer weakness in employee disputes and lawsuits.

The small investment in creating, updating and issuing a handbook to your employees will pay for itself with the first issue it helps resolve.

5. Improve your job descriptions

The use of clear job descriptions will give each employee, regardless of their position, direction and accountability. The purpose of a job description is to clearly state your expectations of an employee. Solid job descriptions help with everything from recruiting to reviews, disability claims and even unemployment cases.

6. Closely monitor employee work hours

If you have over 50 employees, ACA rules will apply. It is crucial that you monitor the hours of employees with fluctuating schedules. The magic number is 30 hours per week, on a consistent basis. Our iSolved solution can help you determine eligible employees and provide reporting required for ACA.

7. Provide training where it matters most

Workers in these industries could be new to the workforce, new to the industry or may never have managed people before. It would be wise to provide “soft skills” training like customer service, conflict resolution and time & task management. These can be done on-site or on-line. Companies that take the time to develop their staff tend to see less turnover, higher customer satisfaction and greater productivity.

If you hire a lot of temporary workers around the holidays, it is also important to provide some level of training for the job, and on safety issues, so they can become productive much earlier.


These tips are really only the tip of the iceberg for hiring and managing a minimum wage workforce. MassPay helps clients with these and many other HR and payroll related issues, compliance audits and training, so that they can stayed focused on running their businesses.

Explore our site or contact us for a no-obligation discussion on how we can help you hire and manage better employees, stay in compliance with ACA and wage and hour laws, and be successful.

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