Last night the Senate Labor Committee voted 7-4 to recommend passage of S.1, An Act Relating to Labor and Labor Relations - Minimum Wages. Voting against passage were Senators De la Cruz, Lombardo, Lombardi and Picard. Other members of the committee did express some support for delaying the increase to January 1, 2022, but S.1 passed as follows:
The bill increases the minimum wage from $11.50 to $12.25 October 1, 2021; to $13.00 October 1, 2022, $14.00 October
1, 2023 and $15.00 October 1, 2024.
The Chamber testified against the bill for the following reasons:
1. Timing - the timing for the first increase could not be worse as Rhode Island's business community struggles to remain in business. This is what our testimony said:
Members of the business community understand and appreciate the desire to improve wages in the state. We share the goal of ensuring Rhode Islanders have the employment opportunities and earning capacity to support themselves and their families. However, the State’s business community continues to experience the significant economic strains of the 2020 pandemic, and these challenges are expected to continue for the foreseeable future. Adding the proposed increases in the minimum wage to the continued state-mandated capacity restrictions currently in place will only compound the barriers to getting the economy going again, adding significant costs to reestablishing and growing Rhode Island’s small businesses.
2. Other costs - an increase in the minimum wage also raises the cost of unemployment insurance, workers' compensation insurance, FICA and premium pay. This is what we said:
In addition, these and other related costs associated with the proposed increase in the minimum wage are increases that cannot be passed onto a dwindling customer base under the current circumstances. Unfortunately, while businesses have tried to be creative and remain agile in this new world, the current pandemic situation is imposing significant strains on businesses, forcing many to make very difficult decisions about staffing and benefits for those that remain.
This is the time to make your voice heard. Please send an email to your State Senator and State Representative now - before the end of the weekend. Let them know how the change in minimum wage and the October 1, 2021, date will affect your business specifically. Many legislators are not business owners so they may not understand how the wage and date impacts a business. Please be respectful – speak from the heart – give facts. Thank you for your help!
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The Greater Newport Chamber of Commerce