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Two New Laws Affect Rhode Island Paychecks

Rhode Island enacted two new laws affecting how employees in the state are paid.  One law raises the minimum wage, while the other allows employers to petition the state to pay employees biweekly.

Minimum Wage Increase

Effective January 1, 2014, the minimum wage in Rhode Island will be $8 per hour.  Only last year, the state raised the minimum wage from $7.40 to $7.75.

Bi-Weekly Pay

Also effective January 1, 2014, new legislation allows employers to petition the Department of Labor and Training for permission to pay employees biweekly rather than weekly.  If permission is granted, it remains in effect as long as payroll is regularly satisfied on time, the information provided in the request does not change, and the employer remains in compliance with all other state labor laws.

There are two methods to request permission, depending on whether the average payroll exceeds double the minimum wage or not.

Employers that pay more than double the minimum wage, on average, must show:

  • The employer pays wages on a predetermined date at least twice monthly;
  • The employer has a surety bond or other security of at least two times the highest biweekly payroll for the employees in question for the preceding year; and
  • If the employees are subject to collective bargaining, the employer has the union’s written consent for all employees in the bargaining unit.

Employers that do not pay more than double the minimum wage, on average, must show the three factors listed above and a “good and sufficient reason” for the waiver to be granted.  They must also provide additional information about the proposed payment scheme, including the salaries of the employees involved, the method of payment, and other details.  Finally, they cannot have a history of wage violations.  Time will tell how stringent the Department of Labor and Training will be in evaluating if a “good and sufficient reason” for a waiver exists.

Wage payment frequency is often overlooked by employers.  While this law sets a standard for compliance, other states merely require a request be made to their departments of labor.  Regardless of the standard, compliance is often easy, but only if you remember to request a waiver.  Brody and Associates regularly advises management on complying with the latest state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.