State economies are affected by a range of factors, both within the state itself and by national or global determinants. The condition of a state economy will have its own impact on the cost of living, availability of jobs, wages, and more. Minimum wage is directly affected by the state economy, which means it should change over time to accommodate employees fairly.
Any changes to minimum wage will impact workers and employers alike, though this effect may manifest in many different ways. For some employers, an increase to minimum wage may stretch their finances to a breaking point. If a recent change in minimum wage, in addition to other factors, has led your small business into dangerous financial waters, Behm Law Group, Ltd. can help you file for bankruptcy in Fairmont, MN.
In January of 2019, Minnesota raised the minimum wage by 2.16% to a rate of $9.86 per hour for large employers and $8.04 per hour for small employers (and for underage employees). This change in minimum wage reflects the nearly annual changes in inflation, which means it will have positive and negative effects to all parties involved.
For employees, the increase in pay will have a very positive impact on their lives. For employers, on the other hand, even a small increase in minimum wage can impose a much higher cost of worker compensation.
For large employers, this increased expense doesn’t usually create a serious impact, but small businesses can take a hit. Businesses established as a sole proprietorship or a partnership in particular will have a harder time compensating for minimum wage increases over time because the owner’s personal debts include all their business debts.
If you own a small business as a sole proprietorship or partnership and are struggling with the changes to minimum wage in addition to other expenses, Behm attorneys can help you petition for Chapter 13 or Chapter 7 bankruptcy relief.
Chapter 13 bankruptcy provides a debt reorganization plan that gives you a three to five-year repayment period and discharges portions of your debts. This type of bankruptcy also allows you to keep your business running with long-term stability.
Chapter 7 is a bankruptcy process available to all types of businesses, big or small. This chapter works to discharge debts in exchange for the liquidation of non-exempt assets. It’s one of the most effective bankruptcy processes in terms of concretely resolving debts, but it could require you to shut down your business for the foreseeable future.
Owning and operating a business is a difficult profession, and it can quickly become more difficult with small changes like the increase in minimum wage this year. If you’re considering filing for bankruptcy in Fairmont, MN to find debt relief for your business, contact Behm Law Group, Ltd. at (507) 387-7200 today.