Imagine you are a Compensation Manager at a large service organization. Roughly 700 of your employees are paid the MWR (Minimum Wage Rate), which is presently $7.25 per hour. The CEO recently came to the CFO (your boss) in a highly excited state. He was upset, because he had learned that local legislators were preparing to propose an increase to the local MWR to $7.75. His frustration was obvious as he declared, “This will put us out of business!”

The CFO wants you to prepare a brief that will make the CEO feel better. He wants you to hit all of the following areas:

1. Changes in cost to the organization brought about should the legislation pass.
2. What legal issues arise if you opt to convert some minimum wage positions to

   positions that might not be subject to the FLSA?

3. What other HR strategies might be used to minimize cost?
4. Since the vast majority of your minimum wage workers are females, do you have any

   discrimination concerns?

5. What might this do to your competitiveness in the region?
6. Any additional issues you might want to raise that will calm the CEO.
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