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Question: Case Three: Pay More Than the Law Requires?
In 2010, during very difficult economic times, the Hobby Lobby retail chain with 455 stores in 36 states raised its company minimum wage for full-time employees to $11 per hour, nearly $4 more than the $7.25 required under federal law. Why did the company raise its wages well beyond the law's requirements? David Green, the CEO of the privately owned corporation, said, "We have always tried to be a company that serves their employees."131 Hobby Lobby had raised its minimum wage to $10 per hour in 2009, and the results were so positive that the company decided to provide another raise in 2010. Green explained the company's reasoning: We're 100 percent excited about what we've done. We have had single mothers who were able to quit their second jobs. We have had employees come up and cry. The math of it said it would have cost us millions of dollars. But the results from the employees showed us differently; it really didn't cost anything because retention is important.132
Case Three Questions
1. How can it make good business sense to pay employees more than the law and the market require?
2. Would you do as Hobby Lobby did? Explain.
SEMA CONSTRUCTION, INC. v. DIVERSIFIED PROD. INDUSTRIES, 2007 CAL. APP. UNPUB. LEXIS 8189 (CAL. APP. OCT. 10, 2007) FACTS SEMA Construction, Inc., contracted.
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