Handling all the facets of the Fair Labor Standard Act (FLSA) and staying in compliance can be quite a chore. This is especially true when companies are faced with staying current on minimum wage changes and all the rules that surround them, including wage garnishment and record-keeping requirements.

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Although the federal minimum wage has been stagnant since July 2009, there has been a lot of movement to increase minimum wages at state and local levels. Some 29 states plus the District of Columbia have implemented minimum wage increases taking effect this year, and at least 21 localities in California alone have established their own minimum wage rates.

This is not new — the Department of Labor’s Fair Labor Standards Act has been around since 1938 and was intended to guarantee minimum wage levels and to limit the number of hours employees can work in a workweek without additional compensation. It also includes record-keeping requirements and prohibitions on child labor, and later amendments added requirements around equal pay for equal work.

The reason that minimum wage increases are a controversial topic: Some argue adjusting the minimum wage can affect the price of goods and services, current and future levels of employment, economic growth, income inequality and poverty. While sporadic increases have occurred since the 1970s, the federal minimum wage rate has held steady at $7.25 per hour for the past seven years.

When you consider the minimum wage versus inflation, the current federal minimum wage would need to be more than $8 per hour to equal its buying power of the early 1980s and nearly $11 per hour to equal its buying power of the late 1960s.

In the absence of a federal increase, it is anticipated that states and localities will continue to act on their own, and that creates challenges for employers that have employees working in multiple jurisdictions.

Employers are subject to federal, state and local minimum wage laws and likely will need to pay employees the highest applicable rate of the three. That means, in addition to constantly monitoring for state and local wage changes to ensure compliance, CFOs also need to consider alternatives to offset labor costs as minimum wages rise.

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According to a Duke University and CFO Global Business Outlook survey, if the national minimum wage was increased to $10 per hour, 20 percent of minimum-wage-paying firms would lay off workers, 44 percent would slow hiring, 20 percent would reduce employee benefits and 43 percent would raise prices. The same survey found if the national wage were to rise to $15 per hour, 75 percent of companies would consider reducing employment in the future.

Here are a few things your company should consider when navigating the complex minimum-wage landscape.

• Constantly monitor for changes. Employers need to keep up with changes at the local and state level, paying close attention to when they take effect and which employees they apply to. It’s best to keep an eye on various information sources including news outlets, relevant websites and updates from law firms, HR solution providers, and professional associations such as the American Payroll Association.

• Communicate changes and update processes. Once you’re aware of changes going into effect, consider how they’ll impact your workforce and employee morale. If some employees are receiving increases and others are not, tell your employees that the changes are due to the law and not to employee performance. Further, be sure managers and employees are notified; particularly in jurisdictions where required pay notices need to be updated and provided to employees to ensure compliance. Next, update your systems and processes to make sure the new wage rate gets paid accurately.

• Pay attention to record-keeping and reporting. Under the FLSA, each employer must keep certain records for each employee. While generally there is no required form, records must include accurate information about each employee and data about specific hours worked and wages earned. The specific wage data needed includes the basis on which employee wages are paid, the regular hourly pay rate, total daily or weekly straight-time earnings, total overtime earnings for the work week, additions to or deductions from wages, total wages paid each pay period and date of payment along with the pay period covered. Remember that additional requirements may apply under individual state and local laws.

• Consider the difference in rates for federal contractors. One area where the federal minimum wage has increased recently relates to federal contractors. Their wages can be raised using an executive order in lieu of a bill being sent through Congress and then signed by the president. Several years ago, President Obama signed an executive order that requires parties who contract with the federal government to pay workers performing work on or in connection with covered federal contracts a minimum wage higher than that of the general federal minimum wage rate.  As of January 1, 2017, that rate is $10.20 per hour. Keep in mind that the executive order doesn’t apply to certain types of contracts, such as those for services, and some state or local laws may provide greater worker protections.

• Don’t forget state overtime-exemption thresholds. Some states and cities, including New York City and California, have separate overtime exemption thresholds that apply in addition to the FLSA. For example, in California, computer software employees must be paid $41.85 to $42.35 per hour and licensed physicians and surgeons must be paid $76.24 to $77.15 per hour. If they don’t make those amounts, they’re entitled to overtime for any time worked over eight hours.

• Know what minimum wage is pertinent to wage garnishment in your state. The federal Consumer Credit Protection Act (CCPA) sets the maximum amount that may be garnished for creditor garnishments in any workweek or pay period, regardless of the number of garnishment orders received by the employer.  In states that adopt the CCPA standard for creditor garnishments (i.e., those not for support, bankruptcy, or any state or federal tax), the weekly amount garnished may not exceed the lesser of two figures: 25 percent of the employee's disposable earnings, or the amount by which an employee's disposable earnings are greater than 30 times the federal minimum wage (currently $7.25 an hour).

Some states regulate the limitations on creditor garnishment withholding based on the higher of the state or federal minimum wage.  For example, Maine limits the amount subject to garnishment to the lesser of 25 percent of the individuals’ disposable earnings for the week or the amount by which the individual’s disposable earnings for the week exceed 40 times the federal minimum wage or 40 times the state minimum wage, whichever is higher.

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With the enactment of Senate Bill 501, effective July 1, 2016, California brought the local minimum wage into play regarding creditor garnishments by stipulating that the maximum withholding limit is set at the lesser of: (a) 25 percent of disposable earnings, or (b) 50 percent of the amount by which the individual’s disposable earnings for that week exceed 40 times the state (or local, if higher) minimum hourly wage.

• Consider minimum wages for tipped employees. Under the FLSA, tipped employees can be paid a minimum cash wage of no less than $2.13 per hour if the employee receives enough in tips to bring earnings up to the federal minimum wage.  But again, employers must also consider state law. Some states require a larger cash wage than federal requirements. For example, in New York the rate is $7.50 per hour and in Massachusetts it’s $3.75 per hour. Certain states such as California and Oregon, prohibit tip credits, meaning employees in those states must be paid the applicable minimum wage in addition to tips.

Recently there has been movement in more than 20 states to prohibit cities and counties from implementing minimum wages that are different than the state minimum wage.

Some of these restrictions result from legislation and others from court decisions. However, until there is action on the federal level, many states and localities will continue to adjust their minimum wage rates, creating administrative and compliance complexities for employers.

Remember non-compliance with wage and hour laws can be costly. In 2016, the federal Department of Labor brought 10,722 minimum wage violation cases resulting in nearly $35 million paid in back wages, and these figures do not include the thousands of wage and hour lawsuits brought by private plaintiffs.

To avoid penalties and stay in compliance, closely monitor the shifting landscape so you’re not hit with any unexpected curveballs that could impact your bottom line.