Tackle the Minimum Wage Problem by Hiring Out-of-State and Remote Employees

People are back to business in 2021. They are shopping, investing, creating, collaborating, buying, and selling. Businesses and organizations are finally beginning to recover from the blow the pandemic had on the economy and their bottom line. However, there is now something else economically related to pay attention to, which is the increase in the national minimum wage. 

As business owners, you are already aware of the most recent minimum wage increase, but may not be familiar with the other increases over time due to the Raise the Wage Act of 2021 or even too knowledgeable about what this new bill truly means for you.  

This is something that employers have been dreading and hoping would not come to fruition. Now that it has, it is time for business owners to take action and tackle the minimum wage problem. 

How can you as a business owner successfully navigate the rough waters of these changes? 

You can accomplish this by choosing one or more routes; this article will specifically focus on one route in particular while future articles will touch on the others. 

We want to show you how to stay lucrative and thrive even while the minimum wage continues to increase. 

The first option you should look into is hiring remote employees from other states. 

How is hiring remote, out-of-state employees beneficial? 

If you haven’t already, it is time to consider the possibility of hiring remote employees who live out of state. The minimum wage increase is not going anywhere, and it will rise more over five years, according to the bill. By hiring remote staff who live in other states with a lower minimum wage, you can get around having to pay a much higher wage in your state.  

As an example, the chart below shows the money a company in a state can save by hiring remote employees in a state with a cheaper minimum wage.

State of BusinessCalifornia New YorkWashington DC
State of EmployeesKansasGeorgia Michigan 
The difference in Minimum Wage$6.75/hr$7.35/hr$5.55/hr
40/hr Weekly Savings$270 per week per employee $294 per week per employee$222 per week per employee

It makes perfect sense to utilize employees from states with lower wages. Think of the savings you will have left for other important business-related responsibilities and ventures after choosing this business model. 

Hiring out-of-state remote staff will not only help you save on employee salaries but save in other important areas as well. 

Reducing overhead costs

Reducing overhead costs is important when owning and running a business; there is no need to spend extra on frivolous things or expenses that are unnecessary. Buildings and offices for lease can be costly and a headache to keep up with. 

A study found that if a company allowed an employee to work from home just half of the time, it would save on average $11,000 per employee, and each employee would save between $2,000 and $7,000. This is just in general–not even considering using out-of-state employees, which can save businesses even more money. 

By choosing to go remote, or partially remote, money can flow to other areas of need instead of going only where it takes to keep an office space going. You could hire additional employees, upgrade on technology, or start saving larger sums of money for future investments.

Extending hours of operation

When business owners hire outside of their state, they can add a few extra hours to their business day. When a business in California (Pacific Standard Time) hires staff who lives in North Carolina (Eastern Standard Time), the employees in NC can open up and start working three hours before employees in California. Ultimately, employing people living in different times zones allows your business to “stay open” longer and you won’t even have to pay for overtime. 

Did you know…

There are many other general benefits to hiring remote employees–in-state and out of state–that will save you money as a business owner. 

  • Hiring remote employees will reduce healthcare costs.
  • Hiring remote employees will save you from paying commuter benefits.
  • Hiring remote employees will reduce office equipment expense costs.
  • Hiring remote employees will increase productivity.
  • Hiring remote employees will reduce absenteeism. 

It is clear that hiring remote employees is a viable option business owners need to look into before the next minimum wage increase is set to begin.

Out-of-state remote employees get benefits too 

Business owners aren’t the only ones reaping the benefits of hiring remote employees out of state. You want what is best for your staff, you want them to be happy and fulfilled with the job they are doing for you, and you want them to be productive. There are several employee benefits for going remote.

  • Employees do not have to move to work for your company; they can work in the location in which you found them. This not only saves you money but obviously saves your employees’ money and time as well. The pressure of having to relocate is removed from the table.
  • Employees feel and are more productive when they can work from home, or wherever they desire. A study found that 53 percent of remote workers stated they were likely to work overtime, while only 28 percent of their in-office counterparts suggested they would do the same. When a person is working from their home, they are insulated from the daily distractions that take place in an office; they aren’t barraged with impromptu meeting requests or idle chats from colleagues. Instead, they can hone in on the task at hand without interruption. 
  • Employee stress is reduced when they are able to work remotely. According to a survey from Mental Health America, respondents said that remote work could help them reduce stress and improve productivity by reducing distractions during the workday (75%) and interruptions from colleagues (74%), keeping them out of office politics (65%), allowing for a quieter work environment (60%), and giving them a more comfortable (52%) and personalized (46%) work environment.
  • Employees save money when working remotely as well. A recent FlexJobs survey discovered that those who work remotely save on average $4,000 a year. This takes into account, commute, gas, insurance, eating out, purchasing work clothes, public transportation, and tax breaks. 

Going remote is not only cost-effective for companies, but oftentimes employees appreciate and even prefer the ability to do so. Happier employees can mean more productive employees, which positively affects the bottom line. Allow your employees to feel secure, taken care of, and content. 

Conclusion

As a business owner, there are steps you need to take now to manage the rise and the continuing rise of the minimum wage. Be proactive now so that you can tackle the rise effectively and efficiently. The bill is here to stay–so go ahead and make a plan of action. 

By deciding to implement the pragmatic option of hiring out-of-state or remote employees, you are already on your way toward increased progress, stability, and growth.