• Consider cost of living when determining the minimum wage for a position.money makes money image by Andrey Andreev from Fotolia.com
  
  As of July 24, 2009, the Federal minimum wage for hourly non-exempt employees is $7.25 per hour. Some states may have a higher or lower minimum wage although according to the U.S. Department of Labor, the higher figure applies. In addition to federal and state minimum wage laws, there are several other factors to consider when developing the best practices for determining the appropriate minimum wage for any hourly position.
  
  

Cost of Living

• The cost of living in your specific geographic area is an important factor to consider when determining a minimum wage for a position. While state and federal laws mandate minimum wages based on average costs of living, it may vary significantly in different areas of the state. For instance, according to cost of living calculations on the Bankrate website, a person making an average of $40,000 a year in Ft. Meyers, Florida would require an 8.16 percent increase to maintain the same standard of living in Miami, Florida.
  
  

Competitive Wages

• Determining wages that are competitive in your area is important for attracting candidates to the job. If you are a retailer considering an $8.00 per hour starting wage for cashiers, while other local retailers are starting cashiers at $8.50 or even $9.00 an hour, prospective employees will be less likely to apply for your cashiering positions. Wages should also be competitive within your company and differences should be apparent in the job description. For instance, customer service representatives at retail locations are typically responsible for regular cashiering duties as well as handling issues at the customer service desk and therefore the starting wage for customer service representatives will be slightly more than for cashiers. Higher job expectations translate into higher wages. Benefits, such as health insurance and paid vacations, should be factored in to your calculations.
  
  

Employee Impact

• Carefully consider the requirements of the position including education and experience, as well as the type of employee you are looking for. Competitive wages will likely draw more suitable candidates to a position. The amount a person is paid also has a direct impact on how well he performs his job as well as his overall opinion of the company he works for. Some studies have also suggested that employees who feel underpaid are more likely to steal from their employers.