The first thing to consider when looking to hire any employees is wages. It is best to check your local state and city governments to see what the minimum wage is to ensure you are not paying any employees below the minimum wage; for Massachusetts the minimum wage is $12 per hour and Rhode Island is $10.50 per hour as of January 1, 2019. There are employees who are exempt from the minimum wage are tipped employees such as restaurant servers ($4.35 per hour in Massachusetts and $3.89 per hour for Rhode Island). Other exceptions to the minimum wage in Rhode Island according to the state are full-time students under 19 years old working at nonprofit religious, educational, librarial, or community service organizations ($9.45 per hour); 14 or 15-year olds who do not work more than 24 hours per week ($7.88 per hour); or any employees that work in a domestic service in or about a private home, federal service. Voluntary service in educational, charitable, religious, or nonprofit organizations. If you are looking to hire hourly employees, any time they are working over 40 hours per week are subject to the compensation of 1 ½ times their regular rate (wage).
Another cost when looking at hiring employees is Social Security and Medicare Taxes. As the employer, you are not only responsible for withholding 6.2 percent for Social Security and 1.45 percent for Medicare from employees’ paycheck, but you must also pay 6.2 percent and 1.45 percent for each employee to match what they put in. For Rhode Island, if you have 18 or more employees you are required to pay them for sick leave and in Massachusetts if you have 11 or more employees than you must provide paid sick leave. As an employer you must pay federal unemployment tax under FUTA (Federal Unemployment Tax Act), this is paid solely by your business and not taken out of employees’ paychecks; you will also be subject to pay for state unemployment tax as well. Your business will also need worker’s compensation insurance, Rhode Island requires that any employee who is injured physically or mentally (from physical injury or emotional stress greater than day-to-day stresses), you must compensate them with wage replacement benefits that are equal to 75 percent of their average spendable weekly wage. For Massachusetts, if a worker is permanently incapacitated, they will be entitled to 66 percent of their gross average weekly wage for as long as they are disabled; those who are temporarily totally incapacitated will receive 60 percent of their gross average weekly wage of the 52 weeks before the injury date for up to 156 weeks; and those who are temporarily partially incapacitated are entitled to 75 percent of their weekly temporary benefits (Temporary benefits are 60% of their gross average weekly wage) for up to 260 weeks.
Now with unemployment being low and the younger generations having different needs, wages are not enough to entice qualified workers. Many companies are offering benefits to attract employees such as health, dental, and vision insurances; life insurances, 401ks, IRA’s, and more. You may also choose to offer other incentives depending on your industry, such as: proving employees’ uniforms, free meals for food service employees, classes and other on-site training, and more.
Other miscellaneous employee costs could be your company offering employee discounts, providing snacks and coffee or other snacks, office supplies such as computers and desks, or any other supplies your employees may need to complete their job properly.
Employees are crucial to any business properly functioning and if you want to have the best staff then that will come at a price to your business. It is best to sit down with your accountant to develop a plan on how much you will compensate each employee and what benefits you would like to offer to them. An accountant will be able to review your financial records to help guide you with providing wages and benefits to employees without your business going into the negatives. Many local accounting firms, such as Chamberland Business Accounting, will also provide payroll services that are much cheaper and more convenient compared to the larger corporate-run companies. An accounting firm will also make sure that