The federal minimum wage is $7.25 per hour and was last updated in 2009. Some states follow this federal model, but many have their own minimum wage rates based on local living costs and other factors.
Wisconsin adopts the federal model, but it also includes additional exemptions based on age and other factors. Failing to adhere to the minimum wage regulations can lead to business interruptions and significant fines. Here's what you need to understand about Wisconsin's minimum wage laws and how to ensure that your payroll processes are compliant if you operate in the Badger State:
Wisconsin largely follows the federal minimum wage model in that the base minimum wage is the same as the current federal minimum wage of $7.25 per hour.
Tipped employees, such as waitstaff, must be paid at least $2.33 per hour, $0.20 higher per hour than the federal minimum of $2.13. Employers must make up the difference if a tipped employee does not earn at least $7.25 per hour during the pay period in combined wages and tips.
Under Wisconsin wage regulations, minors must be paid the same minimum wage as adults. However, there is a temporary exception for employees under the age of 20 called the opportunity wage.
Workers under the age of 20 can be paid a lower rate, called the opportunity rate, which is currently $5.90 per hour. This rate is only valid for the sooner of the first 90 consecutive days of employment or the date the employee turns 20 years old.
A tipped employee eligible for the opportunity wage can be paid $2.13 per hour plus tips with the same tip credit rules; then, they must receive $2.33 per hour once the 90 days are up, or they turn 20 years old.
Under Wisconsin minimum wage regulations, camp counselors must be paid these rates regardless of their age:
Golf caddies on 9-hole courses must be paid $5.90 per hour, $10.50 per hour if the course has 18 holes.
Employees of public construction projects must be paid according to prevailing wage laws set by the US Department of Labor. Wisconsin also has additional rules regarding prevailing wages for state and local public works projects, which vary based on the project scope, budget, and bid dates.
The impact of minimum wage on payroll is determined not only by the wages allowed by federal, state, and local governments but also by any mandated benefits and what may be owed to an employee upon termination or quitting.
Wisconsin is an at-will state, so no notice needs to be provided to an employee if they are terminated. They can also quit at any time without penalty. If an employment contract states that any fringe benefits are owed to an employee, even if they are paid minimum wage, you may be held liable for those fringe benefits if they are not paid after termination.
If an employee is not paid in accordance with Wisconsin minimum wage laws, a minimum fine of $10 and a maximum of $100 per offense must be paid to the state. This does not count additional fines and penalties from the federal Department of Labor, in which under the Fair Labor Standards Act, willfully or repeatedly paying a sub-minimum wage is subject to a $1,000 penalty per violation.
Keeping compliant with Wisconsin labor laws is critical to keeping operations smoothly running and avoiding payroll snags. Paying the legal minimum wage also helps avoid costly disruptions and penalties. Ensure your business is compliant with Wisconsin’s minimum wage laws. Contact Payroll Freedom today for expert payroll management and compliance support.