Running a small business means walking a fine line. Employers often find themselves torn between making employees happy, and making sound decisions for their business. Though a recent report has shown that smaller businesses in Illinois are growing, a change proposed by Governor Pat Quinn may reverse the trend.
In his annual “State of the State” address, Governor Quinn proposed raising the state minimum wage from the current rate of $8.25 per hour to $10.00 per hour. While this will likely make things easier on many small business employees, small business owners could feel the pinch. According to many small business owners, this change may prevent them from hiring. In some cases, businesses may even be forced to reduce their current staff in order to cut costs.
This is in part because there are hidden costs associated with payroll that many people don’t consider when discussing raising the minimum wage. Small businesses have to consider employer taxes such as FICA, social security, and for some businesses, increased healthcare costs for full-time employees this year. In order to defer these costs, many businesses would be forced to consider raising prices, putting off expansions and hiring, cutting employee hours, or even laying off current employees in order to continue turning a profit.
Economic recovery usually occurs more slowly for small businesses than larger corporations. According to one local business owner, Illinois’ current economy currently cannot support the steps small business owners would have to take in order to stay afloat if the proposed $1.75 increase in the state’s minimum wage is approved. Furthermore, many small business employees also realize that the increase would cause prices to go up, causing them to look on the change with less favor than might be expected.
When running a small business, there are a number of factors that need to be considered. If you or someone you know owns or is considering starting a small business in Illinois, and have questions about how changes in the minimum wage law would affect you, contact the qualified attorneys at the Miller Law Firm, P.C. for a consultation today.