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APA Comments on Proposed Increase to Federal Minimum Wage

BY: Alice P. Jacobsohn, Esq. | 03/09/21

The APA Government Relations Task Force Subcommittee on Federal Issues asked congressional leaders to adopt a phased approach if and when the federal minimum wage is increased. A phased approach will allow payroll managers and their employers time to update their systems and implement the changes.

Payroll Impacts

The APA did not take a position on the amount of the federal minimum wage and, instead, focused on payroll impacts. Payroll professionals will need time to:

  • Determine whether the federal minimum wage or a higher state or local minimum wage applies
  • Assess which employees’ wages must be increased
  • Make any necessary adjustments to employee benefits, such as retirement plan contributions
  • Consider the effects on employer operations
  • Adjust employment tax withholding
  • Communicate with appropriate team members about the new minimum wages and employer-implementing measures

In addition, the APA requested that the phased increases occur on January 1 each year to coincide with changes made at the state and local levels and to accommodate payroll processes.

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Alice P. Jacobsohn, Esq. is Director of Government Relations for the APA.